ITR form decoded for you
Mumbai: This year when you file your income-tax returns, you will have to do some extra leg work on disclosing your income — both from salary and from house property. Recently, the Central Board of Direct Taxes (CBDT) notified a new income-tax returns (ITR) form. The new ITR form 1 (Sahaj) will be applicable for the assessment year 2018-19.
First, let’s understand what is ITR-1. ITR-1 is for individual tax payers whose income does not exceed Rs50 lakh in a year. Also, the income defined under the category includes income from salary, income from one house property and income from other sources such as interest received. Last year, around 3 crore individual taxpayers had filed their returns using ITR-1.
Now let’s see what has changed for you and what you should do:
So far in your ITR-1, you had to just mention the total income from salary or pension, income from one house property and income from other sources. In the amended form, which you will have to use this year, you have to give a break-up of total income from salary or pension and income from one house property.
Total income from salary or pension has five break-up—salary excluding all allowances, perquisites and profit in lieu of salary, allowance not exempt, value of perquisites, profit in lieu of salary and deduction under section 16. Meanwhile, under house property, if the house you own is let out, you will have to now give the following details — gross rent received or receivable or lettable value, tax paid to local authorities, annual value, 30% of annual value and interest payable on borrowed capital. These are the two main changes that you will see in the amended ITR-1.
How to get the details?
If you are planning to file your ITR and the form that you have to use is ITR-1, you will have to know the break-up. According to tax consultants, a taxpayer can easily get their salary break-up either in the salary slip or in the form 16 that the employer gives them. You should get your form 16 next month.
“This break-up is easily available in the Form 16 issued by the employer to the individual. The only additional detail will be break-up of salary into allowances and other salary which is also available on payslip or annexure to Form 16 issued by most employers,” said Parizad Sirwalla, partner tax, KPMG. Once you identify the break-up, the process remains the same to file your ITR.
What else should you know?
This time, non-resident Indians (NRIs) will not be able to file their returns using ITR-1. “ITR-1 for AY 2018-19 can be filed only by a resident Indian. As a non-resident cannot file his/her returns in ITR-1 for AY 2018-19, he/she will have to file ITR-2 or other forms as may be the case,” said Archit Gupta, chief executive officer (CEO), ClearTax.