As mentioned in our article Basics of Income Tax Return Different forms are prescribed for filing of returns for different tax-paypers(Individual, Hindu Undivided Family, Firm ) and nature of income (income from salary, business etc). Income Tax Return is to be filed only when Gross Total Income ( Income from all sources ex: Salary, House, Interest from saving bank account ) before deductions is more than the exemption limit specified by the government as explained in Basics of Income Tax Return. In this article we shall see how to fill Income Tax Return ITR1 so let’s learn more about ITR-1 for the Assessment Year 2012-13(financial year 2011-12). Income Tax Dept Instructions for filling ITR-1(pdf) also explains how to fill ITR-1.
Table of Contents
Income Tax Return Form 1 (ITR-1) also called as Sahaj (which means easy in Hindi) applies to Individual with income only from:
1. Income from salary/pension: or
2. Income from one house property(excluding where loss brought forward from previous year): or
3. Income from other sources( excluding winnings from lottery and income from races horses)
So if you have income from business or profession or have Income from Capital Gains you cannot use ITR-1 Form, you have to use other ITR forms. It is the simplest of Income Tax Return Form. ITR-1 Form can be downloaded from here(pdf)
To fill Form 16 we shall take example of Mr. T. Mehta who has
- Income from salary : Document proof is Form 16. TDS for salary is updated in the Form 26AS.
- Income from other sources: Interest on saving bank account (Rs 5000) and Interest from Fixed Deposit(Rs 20,000). Documents for:
- Interest on saving bank account document is bank account statement. No TDS is deducted for interest on saving bank account.
- Interest on Fixed Deposit: Document is Form 16A which shows TDS cut by bank at the rate of 10% if interest on the Fixed Deposit in the financial year is more than Rs 10,000 . As Mr. Mehta has earned interest of Rs 20,000 bank would deduct 10% of 20,000 i.e 2000. This is updated in the Form 26AS.
- He earned dividend from stocks and equity mutual funds for amount Rs 2,200. Interest from PPF was Rs 672. This income is tax free or exempted income
- Chapter VI-A Deductions: He has made investments which allow him to save income tax. The proof of these investments were submitted to his employer so these are reflected in his Form16.
- Section 80C: He invested Rs 30,000 in Public Provident Fund (PPF), paid Rs 7,000 as premium for LIC policy. These investments allow him to save tax under section 80C.
- Section 80D : He paid Rs 10,000 for premium of health insurance policy for his family.
- Tax Deducted at Source(TDS) is Rs 46,269.
- Salary income, Rs 44,269 shown in Form 16, including Education Cess and Surcharge.
- Interest on Fixed Deposit Rs 2,000 shown in Form 16A given by bank.(Note bank gives TDS only when interest on FD is more than 10,000 in an year)
Mr. Mehta has to fill ITR-1. Let’s see how the above mentioned details get reflected in ITR-1.
ITR1 form is divided into various parts such as:
- Part A: Personal Details : Filling Individual ITR Form: Fields A1 to A22 covers it.
- Part B: Gross Total Income
- Part C : Deductions and Taxable Total Income
- Part D : Tax Computation and Tax Status
- Bank Account Details ( Mandatory in all cases irrespective of refund due or not)
- Sch IT – DETAILS OF ADVANCE TAX AND SELF ASSESSMENT TAX PAYMENTS
- Sch TDS1: Details of Tax Deducted at Source From Salary.(As per Form 16 issued by Employer(s))
- Sch TDS2-DETAILS OF TAX DEDUCTED AT SOURCE FROM INCOME OTHER THAN SALARY (As per Form 16A issued by Deductor(s))
- SUPPLEMENTARY SCHEDULE TDS 1
- SUPPLEMENTARY SCHEDULE TDS 2
Every field in the form has a tag for example:Tag for FIRST NAME is A1, while Income From Salary/Pension is A13. These tags help to find the appropriate field fast. We shall be referring to these tag names along with field names.
General Instructions for filling the Form
Quoting from Official Instructions for filing ITR2(pdf)
- All items must be filled in the manner indicated therein; otherwise the return maybe liable to be held defective or even invalid.
- If any schedule is not applicable score across as “—NA—“.
- If any item is inapplicable, write “NA” against that item.
- Write “Nil” to denote nil figures.
- Except as provided in the form, for a negative figure/ figure of loss, write “-” before such figure.
- All figures should be rounded off to the nearest one rupee. However, the figures for total income/ loss and tax payable be finally rounded off to the nearest multiple of ten rupees.
Part B:Gross Total Income
As we know ITR-1 applies to people earning Income from Salary. Income can be charged under this head/category of Income From Salary only if there is an employer-employee relationship between the payer and payee. Salary includes basic salary or wages, any annuity, gratuity, advance of salary, leave encashment, commission, perquisites in lieu of or in addition to salary and retirement benefits. Income from Salary explains it in detail.
Document which proves the salary earned is Form 16 and Form 12BA.
- Form 16: After the financial year ends, employer gives employee Form 16 which will contain all the earnings, deductions and exemptions available. Understanding Form 16: Tax on income explains Form 16 in detail.
- Form 12BA: give details of Perquisites given by the employer to employee. Understanding Perquisites, Understanding Form 12BA talks about Perquisites in detail.
Form 16 of Mr. Mehta is shown in picture below. While Total salary is 6,24,600 because of exemptions under Section 10 ex: HRA, Transport the Gross Total income comes out to be 6,01,900. This is what needs to be filled in field B1 of ITR-1, Income From Salary
So Part B if ITR 1 for Mr. Mehta will be as follows:
Part C : Deductions and Taxable Total Income
As mentioned earlier Mr. Mehta had invested Rs 30,000 in Public Provident Fund (PPF), paid Rs 7,000 as premium for LIC policy. These investments allow him to save tax under section 80C. He paid Rs 10,000 for premium of health insurance policy for his family which allowed him to save tax under Section 80D. He had submitted proof of these investments were to his employer so these are reflected in his Form16 as shown in picture below.
This is reflected in ITR1 Part C as shown in picture below:
Proof for Deductions not submitted to employer
If you have not submitted the proof of tax saving instruments to your employer. Then it will not be reflected in Form 16. But you can still show it in the ITR as shown in image ITR1:Part C.
What would be the difference then: Suppose Mr. Mehta had not submitted the proof then entries in Form 16 for deductions would be 0 hence Total income in Form 16(Point 11 in the image of Form 16:Deductions) would be Rs 6,01,900 and not 5,54,900. This would result in his employer deducting more tax for him.
Part D: Tax Computation and Tax Status
We need to now compute tax for Mr. Mehta. Mr. Mehta total taxable income is: Rs 5,79,900 breakup as follows:
- Income from salary after deductions ( 5,54,900) and
- Income from Other Sources (Interest on Saving Bank account Rs 5,000 and Rs 20,000 Interest from FD)
Calculation of Tax
Mr. Mehta is man below 60 years of age so his exemption limit as per Assessment Year 2012-13 is 1,80,000. So the computation of his income is given below
|Income chargeable at 10%||3,20,000||32,000|
|Income chargeable at 20%||79,900||15,980|
|Education Cess @ 3% of Income Tax Payable||1,439|
|Total Tax liability||49,419|
|TDS / Advance Tax deposited||46,269|
|Net Tax Due||3,150|
Mr Mehta has some Net Tax Due. This is because of interest on Saving bank account and TDS for Interest on FD was to be at 20% because of Mr. Mehta income slab but bank cut at 10%. So Mr. Mehta has to pay Self Assessment Tax of Rs 3,150 using Challan Challan No. ITNS 280 is used for payment of Income tax.
- Select (0021) INCOME-TAX (OTHER THAN COMPANIES) in tax applicable field
- Select (300) SELF ASSESSMENT TAX in type of payment.
After paying the tax liability, Part D , Tax Computation and Tax Status of ITR-1 would be as shown in image
- While efforts have been made to provide correct information, this is our understanding of the Income tax law. Apologies upfront for any mistakes. Please let us know and we will correct.
- Please do not construe this as professional financial advice. You should consult a qualified income tax expert(CA/income tax lawyer) prior to making any income tax decision. We accept no liability for any interpretation of articles or comments on this blog being used for actual taxation purposes.
- Please don’t send us emails asking us to check your income tax detail. But if you have any doubt on the article or some clarification is required or you feel some information is wrong. Please leave it in comment section so that all readers can benefit.
- Calculators : Finotax:Calculator , InvestmentYogi:Income Tax Calculator
- Basics of Income Tax Return
- Filling Individual ITR Form: Fields A1 to A22
- Filling ITR-1 : Bank Details, Exempt Income, TDS Details
- Understanding Form 16: Tax on income, Understanding Perquisites, Understanding Form 12BA
- After filing Income Tax Return
- Income Tax Overview
Picture abhi baki hai mere dost. (Movie is not over yet). In next part we will fill remaining of the ITR-1 Form which has important details like Bank Account, Exempt Income, Filing details of Tax Deducted at Source. Looking forward for your feedback.
Income Tax Dept Instructions for filling ITR-1(pdf)