Want to know how and where the ITR-1 form shall not be taken into consideration? Then, go through the article to obtain full knowledge of the same. But, before that for those who are unaware of ITR-1 form, let us discuss in short about the term ITR-form and then come to our main topic where ITR-form can’t be used.
ITR-1 is an Income Tax Return form where all the income-earning persons are required to file this with the Income Tax Department through online mode. However, one must note that the person’s total income must not be more than Rs. 50 Lakhs. Also, the sources of income can be either from salary, one house property or income from other sources.
The due date of filing ITR-1 is 31st July, 2022. It is necessary to remember the date as no filing of ITR-1 may lead to inconvenience as penalty may be charged.
Now, let us discuss the cases where ITR-1 form cannot be filed by an individual.
First of all, it is clearly mentioned above that, an individual having a total income less than Rs. 50 Lakh are required to file their ITR-1 form. Therefore, it is evident that if a person has a total income of more than Rs. 50 Lakh shall be not be required to file ITR-1. This does not mean that the person is not eligible to file ITR. Instead, the person earning more than Rs. 50 Lakh shall be required to file ITR-2 form respectively.
The second case comes with the condition that the person having earnings from one house property shall be filing ITR-1 form. That means, a person having sources of income from multiple house properties shall be required to file another ITR form but not ITR-1.
Third states, where the person is generating income from sources that are not allowed under the Income Tax Act i.e. Income from Agriculture. Agricultural income is not taxable as per the Income Tax Act. However, a person shall report income from agriculture if it exceeds Rs. 5000 for determining slab rate for taxation. Therefore, a person shall not be required to file ITR-1 form if he or she is earning income from Agriculture.
The fourth case is, where the salaried taxpayer owns equity of an unlisted company, then the earning individual is not required to file the ITR-1 form.
Where the earning individual is a director in any company, he or she is not eligible to file the ITR-1 form.
When the TDS has been deducted on withdrawal of money in any bank/post office account in excess of the limit of Rs. 1 Cr. prescribed under section 194N, then ITR-1 form shall not be filed.
ITR-1 can be filed where the salaried person is investing money in shares of a company or mutual funds. However, the time these shares are sold or mutual funds are redeemed, the person shall then, not be allowed to file ITR-1 form as ITR-2 or ITR-3 form is needed to be filed in that circumstance.
A salaried taxpayer belonging to a Hindu Undivided Family (HUF) is not allowed to file ITR-1 form.
In the case where all the eligibility criteria of ITR-1 form is being fulfilled but the asset is located outside India then, in such case ITR-1 form is not the appropriate form to be filed by a salaried person.
And lastly, Income from freelancing work shall not be recorded in the ITR-1 form. The income earned from freelance work is an income earned from business or profession. Therefore, ITR-3 or ITR-4 form shall be filed and not ITR-1 form.
