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ITR-1 (Sahaj): A Guide for Indian Salaried Employees

Picture of Team SaveTax.AI By  Team SaveTax.AI  ·  2 minute read

ITR-1, also known as Sahaj, is the simplest form of Income Tax Return filing in India. It is specifically designed for salaried individuals and pensioners with relatively straightforward sources of income. This guide will help you understand who can file ITR-1, what income sources are covered, and how to file it correctly. You can find more information about ITR-2 for more diverse income situations here.

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Who Can File ITR-1?

You can file ITR-1 if you meet the following criteria:

  • You are a Resident Individual (ROR or RNOR)
  • Your total income does not exceed ₹50 lakhs
  • Your income sources are limited to:
    • Salary/Pension
    • One House Property (Rented or Self-occupied)
    • Other Sources (Interest income, Family pension)
    • Agricultural income up to ₹5,000
Who Cannot File ITR-1?

You cannot use ITR-1 if:

  • You are a Non-Resident Indian (NRI)
  • You have income from business or profession
  • You have capital gains
  • You own more than one house property
  • You have income from foreign sources
  • You hold directorship in a company
  • You have investments in unlisted equity shares
  • You want to claim relief under Section 90, 90A, or 91
Income Components in ITR-1

Salary Income

  • Basic salary
  • HRA (House Rent Allowance)
  • LTA (Leave Travel Allowance)
  • Special allowances
  • Perquisites
  • Professional tax
  • Standard deduction of ₹50,000

Example:

  • Basic Salary: ₹6,00,000
  • HRA: ₹1,80,000
  • Special Allowance: ₹1,20,000
  • Professional Tax: ₹2,400
  • Standard Deduction: ₹50,000
  • Gross Salary: ₹9,00,000
  • Taxable Salary: ₹8,47,600 (after deductions)

House Property Income

For rented property:

  • Annual Value (Rent received)
  • Municipal taxes paid
  • Standard deduction (30% of Net Annual Value)
  • Interest on housing loan

Example:

  • Annual Rent: ₹2,40,000
  • Municipal Taxes: ₹12,000
  • Net Annual Value: ₹2,28,000
  • Standard Deduction (30%): ₹68,400
  • Interest on Home Loan: ₹1,50,000
  • Net Income from House Property: ₹9,600

Income from Other Sources

  • Savings account interest
  • Fixed deposit interest
  • Post office deposit interest
  • Family pension

Example:

  • Savings Account Interest: ₹15,000
  • FD Interest: ₹45,000
  • Family Pension: ₹1,20,000
  • Total Income from Other Sources: ₹1,80,000
Deductions Available in ITR-1

 Section 80C (Up to ₹1,50,000)

Other Important Deductions

  • Section 80D: Medical Insurance Premium
  • Section 80TTA: Savings Account Interest (up to ₹10,000)
  • Section 80E: Education Loan Interest
  • Section 80G: Charitable Donations
  • Section 24: Home Loan Interest (up to ₹2,00,000 for self-occupied property)
Step-by-Step Filing Process

Gather Required Documents

  • Form 16
  • Form 26AS
  • Bank statements
  • Rent receipts (if applicable)
  • Investment proofs
  • Loan statements

Choose Filing Method

  • Online through Income Tax portal
  • Through e-filing utilities
  • Through authorized intermediaries

Filing on Income Tax Portal

  • Login to www.incometax.gov.in
  • Select 'e-File' → 'Income Tax Return'
  • Choose Assessment Year
  • Select ITR-1
  • Fill in personal information
  • Enter income details
  • Claim deductions
  • Pay tax (if applicable)
  • Verify return
Common Mistakes to Avoid

Income Reporting Errors

  • Not reporting all interest income
  • Incorrect salary details
  • Missing exempt income declaration

Deduction Mistakes

  • Claiming deductions without proof
  • Exceeding maximum limits
  • Double claiming of deductions

Verification Issues

  • Not verifying ITR after filing
  • Using incorrect verification method
  • Delayed verification
Important Deadlines and Penalties

Filing Deadline

  • Regular: July 31st of the Assessment Year
  • Late Filing: December 31st (with penalty)

Penalties

  • Up to ₹5,000 for late filing
  • Additional interest under Section 234A, 234B, 234C
  • Prosecution in case of significant delay
Tips for Hassle-free Filing

Record Keeping

  • Maintain monthly income records
  • Keep investment proofs organized
  • Save tax payment challans

Regular Updates

  • Update personal information promptly
  • Link PAN with Aadhaar
  • Keep bank details current

Verification Options

  • Aadhaar OTP
  • Net banking
  • Bank ATM
  • Physical verification form

Filing ITR-1 is a straightforward process when you understand the requirements and maintain proper documentation. Regular tracking of income and investments, timely filing, and accurate reporting will help you avoid penalties and ensure compliance with tax laws. Remember to verify your return after filing and keep copies of all submitted documents for future reference. Stay informed about any changes in tax laws and filing procedures to ensure continued compliance and smooth filing experience in subsequent years.