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Which salaried individuals can't file ITR-1 for FY2018-19
June, 20th 2019

The government has notified the new income tax return (ITR) forms for FY2018-19. But before you sit to file your return, there is one thing you need to ensure - pick the right form. If you file your return using the wrong form, then it will be considered defective.

The basic ITR form for most salaried people is ITR-1. The new ITR-1 form is applicable for salaried individuals with total income up to Rs 50 lakh from salary, one house property, and other sources such as interest income, etc.

But did you know that not all resident salaried individuals are eligible to file ITR 1? That is right. There are certain situations where ITR-1 will not be applicable to salaried individuals for the financial year 2018-19 or assessment year 2019-20. Here are those scenarios.

1. If your total income is more than Rs 50 lakh;
2. If any income arises from more than one house property;
3. If your agricultural income exceeds Rs 5,000 per year;
4. If you are a director of a company;
5. If you have held any unlisted equity shares at any time during the financial year;
6. If you want to claim a deduction against "income from other sources" (other than family pension). This can include activity of owning and maintaining race horses, or winning a lottery; ..
7. If any resident and ordinarily resident of India has assets (including financial interest in any entity) outside India or signing authority in any account located outside India. Basically, having income from any source outside India.
8. If you have received dividend income taxable at special rates (example exceeding Rs 10 lakh per annum from Indian companies);
9. If you have received income from capital gains (short-term and long-term);
10. If you have claimed relief of foreign tax paid or double taxation relief under section 90 and/or section 91;
11. If you have earned income under the head business and profession;
12. Residents not ordinarily resident and non-residents cannot file returns using ITR -1.

What should individuals do in such a scenario?
A resident salaried individual with income only from salary less than Rs 50 lakh a year will be eligible to file ITR -1. However, if the salaried individual, additionally received income from any capital gains and/or has received income from agricultural sources, then he/she is not eligible to file ITR-1 for FY 2018-19. Instead, these salaried individuals need to file using another ITR form.

Alok Agarwal, Partner Deloitte India explains, "Suppose, if you are a salaried individual and have additional income only from agricultural sources which is more than Rs 5,000 during the financial year 2018-19 then, in such a case, you need to file ITR-2 instead of ITR-1. However, the person would have to meet other eligibility conditions of filing ITR-2"

Archit Gupta, CEO, Cleartax.in, a Bangalore-based income tax filing fin-tech platform, said that normally, those resident salaried individuals who cannot file ITR-1 have to file ITR-2 or ITR-3 provided they meet the other conditions of ITR 2/3 as applicable.

If you have made capital gains during the year, you should use ITR-2. Those who have income from more than one house property will also have to use ITR-2. And if you have made any sort of business income, then you should use ITR-3. "However, in any condition, you cannot file two ITR forms," he said.

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