It’s that time of the year again when we all start daydreaming about what we’re going to do with our tax refund, if only we manage to file the returns before the deadline- 31st July 2018. But procrastination often gets the better of us.
So, if you’re dragging your feet on filing your income tax returns this year, it’s the right time to get moving! The Government last year introduced a maximum penalty of Rs. 10,000 for late filing which is applicable with effect from 1st April 2018.
A new income-tax returns (ITR) form was also introduced for individual taxpayers whose income does not exceed Rs. 50 lakh in a year. Here’s everything you need to know about filling the new Income Tax Return (ITR) Form- 1 online.
What is ITR Form-1 (Sahaj)?
ITR Form -1 (Sahaj) is a one-page form that was introduced by the Central Board of Direct Taxes (CBDT) for the assessment year 2018-19. The form was released for taxpayers with an income of up to Rs. 50 lakh, with salary being the primary source of income, besides income from one house property and other income like interest from bank deposits etc.
Unlike last year, where only details of income from salary or pension along with income from one house property and other income were to be filled, the new form requires you to provide a break-up of your income from each source.
Income From Salary
This head is further divided into five columns – in the first column, enter the amount of basic salary received, excluding all allowances, perquisites, and profit in lieu of salary. This part of your in-hand salary is fully taxable.
In the second column, you need to mention the allowances that are not exempt from tax. For example, transport allowance for FY 2017-18 is exempt from tax for up to Rs. 1,600 per month or Rs. 19,200 annually. So, any amount received over and above will be chargeable to tax. Now, in the third column, enter the details of perquisites received including rent accommodation, employees’ stock options (ESOPs) etc.
The fourth column requires you to fill in the amount related to profit in lieu of salary. This is nothing but the payments received by an employee in lieu of or in addition to salary or wages. For example, any amount of compensation you received from your former employer after the termination of employment etc. Once this is done, enter the deductions under section 16 of the Act like professional tax and entertainment allowance etc. in the last column.
Income From House Property
Unlike last year, if you own a house, you were only required to mention the amount of income earned from the house property without providing any additional details. However, from this year onward, you need to mention a few other details such whether it is a self-occupied or a let-out property, gross rent received, interest payments on your Home Loan etc.
In case you let out a property
If your property was let-out during the previous year, you need to provide a break-up of your gross rent received in the first column. In the subsequent columns, mention the property tax paid to local authorities and the annual value of the property. The annual value is your gross rent minus taxes paid.
You can further claim a standard deduction of 30% of annual value and interest paid on your Home Loan. Mention the same in the fourth and fifth columns respectively. In the last column, “Income chargeable under the head ‘House Property”, just enter the annual value after reducing the amount of standard deduction and interest on Home Loan from it.
Income from other sources
Under this head, you need to mention the interest earned from all your bank deposits. Under section 80TTA, an income of up to Rs. 10,000 from bank accounts is exempt from tax under. So, it’s important to declare interest earned and claim the exemption.
That’s it! Remember, the form is to be filled online, however, you can file the ITR Form-1 offline if you are above the age of 80 years or earn less than Rs. 5 lakh and don’t have a refund claim.