How to file your taxes with the new ITR-1 form

Union Finance Minister Pranab Mukherjee on February 26, 2010 presented the Annual Budget, proposing simplifying the task of filing IT returns for individuals. Following this, the Central Board of Direct Taxes (CBDT) notified the New ITR-1 form applicable for FY 2009-10 (assessment year 2010-11).

The format is easier, reader-friendly and is in itself a do-it-yourself guide for taxpayers. Let's take a look at the amended changes and what it means to individuals.

Who it affects and who doesn't

Who can use ITR-1? Individuals whose total income includes:

• Income from salary/ pension; 
• Income from one house property (excluding cases where loss is brought forward from previous years);
• Income from other sources (excluding winnings from lottery and income from race horses);
• Cases where the income of spouse, minor child, etc is to be clubbed with the income of the assessee, SARAL-II form can be used but only if the income being clubbed falls into the above income categories.   

Who can not use ITR-1? Individuals whose total income includes:

• Income under the head "Capital Gains" not exempted from tax, such as short-term capital gains or long-term capital gains from sale of house, plot, etc;
• Income from more than one house property;
• Income/winnings from lottery and income from race horses;
• Income from agriculture in excess of Rs 5,000;
• Income from business or profession.

Income from one house property has now been included into ITR-1 (the new form), which was not the case earlier. In the previous form, an individual having income under the head 'House Property', was required to fill in a different form (ITR-II), which required more information and details to be filled in.

Incomes from other sources has now been covered under the new ITR-1 -- which includes interest income and family pension.

No document needs to be attached to the new ITR-1 form, meaning less paperwork for you the tax-payer.

TT has notified that the return form can be filed with the IT department in any of the following ways:

• By furnishing the return in a paper form;
• By furnishing the return electronically under digital signature;
• By transmitting the data in the return (as above) and thereafter submitting the verification of the return in Return Form ITR-V (released along with SARAL-II form).
• By furnishing a bar-coded return.

For further details, you may visit www.incometaxindiaefiling.gov.in.

Conclusion
At the outset, the new ITR-1 form is chiefly useful for individuals having income from salary, one house property (excluding loss brought forward from previous years), and income from other sources (excluding winning from lottery and race horses).

The form also allows filling in details regarding Advance Tax and Self-Assessment Tax transactions reported through Annual Information Return (AIR). It is less-cumbersome in the sense that there are fewer details that need to be filled (unlike past forms).