ITR Filing: Who Can’t File Tax Returns Using ITR This Year

Who Can’t File Tax Returns Using ITR This Year

It’s important to understand that not everyone who receives a salary can use the Income Tax Return ( ITR-1 ) form to fileĀ  their tax returns. Whether you’re eligible or not depends on certain criteria.

income tax returns
Hindu Undivided Family Taxpayers Cannot File Their Tax Returns Using ITR-1.

Many people who earn a salary use a form called ITR-1, also known as the Sahaj form, to file their tax returns. This form doesn’t require as much financial information as other ITR forms.

But it’s important to note that not every salaried person can use the ITR-1 form to file their tax returns. This is because eligibility for using the ITR-1 form is determined by specific criteria. If someone has engaged in certain transactions during the financial year 2022-23 (assessment year 2023-24), they may not be eligible to use the ITR-1 form.

Read More:- Income-Tax Shocker: Data on Advance Tax Payments Missing in Prefilled Return Forms

Who is eligible to file ITR-1 this year?

ITR-1 can be filed by a resident individual whose:

Total income is not more than Rs 50 lakh during the financial year.

The income can come from various sources such as salary, one house property, family pension income, agricultural income (up to Rs 5,000), and other sources like interest earned from savings accounts, deposits (in banks, post offices, or cooperative societies), income tax refund, and interest received on enhanced compensation.

Who is not eligible to file ITR-1 for FY 2022-23?

If someone has income from any of the sources mentioned, they are not eligible to file tax returns using the ITR-1 form.

Income from capital gains

If someone has earned income from capital gains, such as profits from selling mutual funds, gold, equity shares, house property, or other similar assets, they cannot use the ITR-1 form to file their tax return.

Furthermore, it’s crucial to note that even if someone’s income is below Rs 50 lakh, they cannot use the ITR-1 form if they have earned capital gains from selling assets like equity shares, mutual funds, cryptocurrency, and similar items.

Income from more than one house property

If someone has income from more than one house property, they cannot use the Sahaj form to file their tax returns. However, there is an exception to this rule. If a taxpayer has two house properties with no income and no loan, they can still use the Sahaj form according to income tax laws.

Residency status

The eligibility to use the ITR-1 form for filing tax returns is also influenced by residency status. Individuals who have a residency status of Resident Not Ordinarily Resident (RNOR) or Non-Resident Indian (NRI) cannot use the ITR-1 form.

Long-term capital gains

If you want to claim exemption on long-term capital gains from selling a house property under Section 54, you should use the ITR-2 form instead of the ITR-1 form.

According to the Income Tax Act, individuals have the option to claim exemption on long-term capital gains from house property under various sections.

Hindu undivided family (HUF)

Hindu undivided family (HUF) taxpayers cannot file their income tax returns using ITR-1.

Foreign Assets

If someone has financial assets located overseas or is a signatory in a foreign bank account, they cannot use the ITR-1 form because it does not include the required annexure for disclosing such assets.

What if you filed ITR-1 mistakenly?

If you file your tax returns at the last moment or in a rush to meet the deadline, it’s easy to make mistakes. The income tax department refers to such a tax return as a defective ITR. The simplest way to correct the mistake is by filing a revised ITR. The deadline for filing the revised ITR for the financial year 2022-23 is December 31, 2023.

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2 thoughts on “ITR Filing: Who Can’t File Tax Returns Using ITR This Year”

  1. Pingback: ITR filing: How to File Income Tax Returns Without Form 16

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