Compliance360 Services

• You can file ITR-1 if you have only ONE house property (either self-occupied or let out)
• If you own more than one house property, you must use ITR-2
• You can claim home loan interest deduction (Section 24) and principal repayment deduction (Section 80C) in ITR-1
• Rental income from one property can be reported in ITR-1

• Salary slips for income details
• Form 26AS for TDS information
• Bank statements for interest income
• Investment proofs for deductions

However, Form 16 makes the process easier as it consolidates your salary, allowances, deductions, and TDS details in one document.

1. In the salary section, you'll find fields for reporting your salary components
2. HRA exemption is calculated as the minimum of:
   • Actual HRA received
   • 50% of basic salary (if living in metro cities) or 40% (for non-metros)
   • Rent paid minus 10% of basic salary
3. Enter the exempt portion in the designated field
4. Keep rent receipts and landlord's PAN (if rent > ₹1 lakh/year) for verification

Note: Many employers calculate and show HRA exemption in Form 16 itself.

• Foreign bank accounts (even with signing authority)
• Shares in foreign companies
• Overseas property
• Foreign retirement accounts
• Any other foreign financial interest

In such cases, you must use ITR-2, which has dedicated sections for reporting foreign assets and income as per Indian tax laws.

Tax calculation in ITR-1 follows this sequence:

1. Compute Gross Total Income: Add salary, house property income, and other sources
2. Claim Deductions: Subtract eligible deductions under Chapter VI-A (Sections 80C, 80D, 80E, etc.)
3. Calculate Taxable Income: Gross Total Income minus Deductions
4. Apply Tax Slabs: Based on chosen tax regime (Old or New)
5. Add Surcharge & Cess: 4% health and education cess on tax amount
6. Subtract Tax Already Paid: TDS, advance tax, self-assessment tax
7. Arrive at Final Liability/Refund: Pay balance or claim refund

The ITR-1 form automatically calculates tax once you enter income and deduction details.

• You can use ITR-1 if your agricultural income is up to ₹5,000
• If agricultural income exceeds ₹5,000, you must use ITR-2
• Agricultural income is exempt from tax, but needs to be disclosed for calculation purposes (affects tax slab)
• Report it in the "Income from Other Sources" section under "Agricultural Income"

Note: Even exempt income above ₹5,000 agricultural income disqualifies you from using ITR-1.

• Domestic company dividends are taxable in your hands
• Enter the gross dividend amount (before TDS, if any)
• If TDS was deducted, it will appear in your Form 26AS
• You can claim expenses (up to 20% of dividend income) as deduction against dividend income
• The net dividend income is added to your total income

Important: Since Budget 2020, dividends are taxable at your applicable income tax slab rates.

• You must provide details of all savings/current accounts
• Include joint accounts where you are an account holder
• Provide: Bank name, Account number, IFSC code, Account type
• Exclude: Dormant accounts (no transactions for 3+ years), minor's accounts where you're guardian, loan/OD accounts
• One account must be marked as "Primary" for refund purposes

Penalty: ₹10,000 for failure to provide bank account details (Section 271FA).

• Time Limit: Within 3 months from end of financial year OR before assessment completion
• Process: File a fresh ITR-1 with corrections
• Reasons for Revision: Errors in income, deductions, personal details, missed income sources
• Multiple Revisions: Allowed within time limit
• Verification: Must e-verify revised return too
• No Penalty: For genuine errors and timely revision

Note: If Income Tax Department sends notice about errors, respond to notice instead of filing revised return.

1. File ITR-1 accurately with all income and deduction details
2. System calculates if tax paid > tax liability
3. If refund due, ensure you:
   • E-verify return immediately
   • Pre-validate bank account for refund
   • Provide correct bank details
4. Refund processed in 20-45 days after e-verification
5. Track status on e-filing portal

Common refund scenarios: Excess TDS deduction, higher advance tax payment, eligible deductions not considered by employer.

• Section 80C: EPF, PPF, LIC, ELSS, NSC, home loan principal, tuition fees (up to ₹1.5 lakh)
• Section 80D: Health insurance premium (self, family, parents)
• Section 80E: Education loan interest
• Section 80G: Donations to charitable institutions
• Section 80TTA/80TTB: Interest on savings account (₹10,000/₹50,000)
• Section 24(b): Home loan interest (up to ₹2 lakh)
• Standard Deduction: ₹50,000 for salaried individuals
• HRA: House Rent Allowance exemption

Keep investment proofs handy for verification if required.

• ITR-2: If you don't have business income but have income > ₹50 lakh
• ITR-3: If you have business/professional income
• ITR-4: If you're under presumptive taxation and income > ₹50 lakh (but note: presumptive scheme limit is ₹50 lakh, so you'd need proper books)

Consequences of using wrong form: ITR may be processed as defective return, leading to notices and delays.

• ITR-1 is only for Resident Individuals
• NRIs must use:
  • ITR-2: If no business income
  • ITR-3: If has business income
• RNORs (Resident but Not Ordinarily Resident) also cannot use ITR-1
• Residential status is determined based on number of days stayed in India

If you qualify as Resident Indian (≥182 days in India or meeting other conditions), then you can use ITR-1 if other criteria match.

Methods (choose one):

• Aadhaar OTP: Most popular and instant
• Net Banking: Through your bank's net banking portal
• Bank Account EVC: Generate EVC via pre-validated bank account
• Demat Account EVC: Through your Demat account
• Physical ITR-V: Print, sign, and post to CPC Bengaluru (within 120 days)

Time Limit: Verify within 120 days of filing

Consequence of Not Verifying: ITR treated as never filed - no processing, no refunds, potential penalties

Tip: E-verify immediately after filing to avoid forgetting.