Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
Open DEMAT Account with in 24 Hrs and start investing now!
Direct Tax »
Open DEMAT Account in 24 hrs
 CBDT signs record number of 125 Advance Pricing Agreements in FY24
 CBDT issues guidelines for selection of cases for scrutiny, focus on tax evasion info by law enforcement agencies, note experts
 CBDT issues Guidelines and Procedure for Compulsory Selection of Income Tax Returns for Complete Scrutiny for FY 2024-2025
 Net direct tax collections exceed 2023-24 target
 Govt kicks off direct tax code revision
 ITR 2024 25 Check tax department s update on TDS and refunds
 Income Tax: Why did some taxpayers receive notice for discrepancy in house rent receipt? IT Dept explains
 Income tax exemption: 4 financial instruments you can still invest into before March 31
 CBDT drops small tax demands but not TCS, TDS claims
 ITR Refund: Awaiting money from Income Tax? Here's why you have not yet received your amount
 Income Tax Notice: What to do if you receive a Section 143 (1) notice from taxman?

10 reasons when a taxpayer can't use ITR-1 form Income tax return
July, 04th 2022

Income tax return: The due date for income tax return (ITR) filing for FY22 and AY23 is 31st July 2022. Hence, earning individuals must be busy scanning their income and expenditures for above mentioned financial year and assessment year. However, the taxpayer must know that there are various ITR forms applicable for various kinds of earning individuals. Out of various ITR formed issued by income tax department, most simple form is ITR-1. Many times, ITR-1 is filed by taxpayers as standard ITR form without understanding exact eligibility to file correct ITR form. So, it is important for a taxpayer to know under what circumstances a taxpayer can't fill ITR-1 form.

Speaking on who can use ITR-1 form for ITR filing, Aarti Raote, Partner at Deloitte India said, "The ITR-1 is a simple tax return that can be filed by a resident tax payer having total income of not more than ₹50 lakhs and has income reported from sources like salary, income from other sources and only one house property. One needs to note that the return cannot be used by a director of a company or has tax deferral for ESOP of startups or an individual having agricultural income more than ₹5000 or has capital gains income."

Here we list out 10 reasons when an earning individual can't use ITR-1 form while filing ITR for FY22 or AY23:

1] More than 50 lakh annual income: "If the earning individual is salaried with no other income but total annual income is exceeding 50 Lakh, ITR-2 is the correct form for such taxpayer," said Sujit Bangar, Founder at

2] Income from more than one house property: "If one has one house property, correct ITR form is ITR -1. But if there are more than one house properties, one cannot file ITR-1," Sujit Bangar said.

3] Income from agriculture: We all know that income form agriculture is not taxable. While filing income tax return, one need to report income from agriculture exceeding 5000. Although agriculture income is not taxable, it is required just for determining slab rate for taxation. And in such cases, ITR-1 cannot be filed.

4] Equity investment in unlisted company: "If a salaried taxpayer owns equity of an unlisted company, then in such case, the earning individual is not allowed to file its ITR using ITR-1 form," said Amit Gupta, MD at SAG Infotech — a SEBI registered income tax solution provider company.

5] Director of a company: "If the taxpayer is a director in a company, then in such case, he or she can't use ITR-1 form," said Amit Gupta of SAG Infotech.

6] TDS payment: "If TDS has been deducted on withdrawal of money in any bank/post office account in excess of the limit of ₹1 crore prescribed under section 194N,, then an earning individual can't use ITR-1 form," said Amit Gupta.

7] Stock, mutual fund investor: "If the taxpayer is a salaried person and investing in shares or mutual funds, one can file ITR-1. But once these shares are sold or mutual funds are redeemed, one cannot file ITR-1. For such income correct form is ITR-2 or ITR-3," said Sujit Bangar or

8] HUF family member: If a taxpayer belongs to a Hindu Undivided Family (HUF), then he or she can't use ITR-1 form for ITR filing.

9] Asset outside India: If an earning individual fulfills all criteria for ITR-1, but it is having an asset outside India, then the taxpayer cannot file ITR-1.

10] Income from freelancing: Many software professionals do some or other work as freelancer over weekends or over free time. The income from freelancing is income from business or profession. In such scenario, one cannot file ITR-1. One needs to file ITR-4 or ITR-3, as the case may be.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting