How to file ITR 1 with salary, home loan and other income for FY 2018-19

By CA Naveen Wadhwa and CA Tarun Kumar

The government has made enormous changes in the income tax return (ITR) forms this year. For FY 2018-19, ITR-1 can be filed only by an ordinarily resident individual whose total income does not exceed Rs 50 lakh.

This ITR form can be used to report income from salary, one house property, residuary income (interest, etc.), and agricultural income up to Rs 5,000. From this year, this return form cannot be filed by an individual who is a director in a company or who is holding investments in unlisted equity shares.

Though the return in ITR Form - 1 can be filed through Excel and Java utilities, it is advisable to use the e-filing platform as it is the easiest way to file the return. Further, various basic information and tax details are pre-filled in the ITR form prepared through the e-filing platform.

Here, we have explained the quickest way to file the return in Form ITR-1 using illustrations for easy reference.

Step 1: Go to www.incometaxindiaefiling.gov.in and login with your PAN and password.

Step 2: Go to E-File > Income Tax Forms from the menu.

Step 3: Select the relevant fields on the landing page as shown in the below screenshot and click 'Continue' to proceed further.

Step 4: On the landing page, you will find 7 tabs.
A. Instructions: This tab has general instructions for the taxpayer before filing of return of income.


B. Part-A (General Information): Personal details of taxpayer (name, address, Aadhaar number, mobile n email address etc.) shall be filled in this tab. These details are pre-filled from the e-filing account, which can be edited by the taxpayer.

C. Computation of Income and Tax: In this tab, the details of salary income, certain details of income from house property, interest income (if TDS is deducted) and tax-saving deductions claimed will be auto-filled. The tax liability of the taxpayer will be auto-calculated by the portal. However, taxpayer should cross check the information.

How income will be reported in this tab has been explained in the following illustrations.

Illustration 1: Reporting salary income in ITR-1
For FY 2018-19, Mr A has gross salary of Rs 6 lakh and exempted HRA of Rs 50,000. Unlike last year where only net taxable salary was to be reported, this year individual's salary will be reported as gross salary, exempt allowances, perquisites and profit in lieu of salary. The resultant figure will be reduced by the deductions available under section 16 (i.e., standard deduction, etc.)

Though details are auto-populated, one must cross check the information available in Form-16, salary slips and bank statements.

Illustration 2: Reporting house property income in ITR-1
Certain information such as type of house property, details of income from house property shall be pre-filled from last year ITR and Form 26AS. The format in which rental income shall be reported in ITR has been explained with an example below.

For FY 2018-19, Mr A has earned a rental income of Rs 12 lakh and paid house tax of Rs 10,000. He paid interest of Rs 1.5 lakh on housing loan. Mr A has also received arrears of rent of Rs 1 lakh pertaining to previous FY, i.e., FY 2017-18.

While reporting income from house property, an assessee has to select the type of house property. Earlier he could either mark a house property as 'self-occupied' or 'let out' during the year. A new option 'deemed let out' under the category of 'type of property' has been inserted in the new ITR 1.

Up to last year, an assessee was unable to file return in ITR 1 if he had received any amount in the form of arrears/unrealised rent. This year the tax department has made the necessary changes in the ITR 1 to report the arrears/unrealised rent.

Arrears of rent received by an assessee, pertaining to the prior period, is taxable in the year of receipt under the head income from house property. However, 30 percent of the arrears or unrealised rent is allowed as a deduction from such rental income.

ITR 1 hasn't provided the option to show 30 percent of arrears as a deduction separately. Thus, the taxpayer should report only the taxable part of arrears of rent received during the year, i.e., arrears of rent received less 30 percent.

Illustration 3: Reporting income from other sources in ITR-1
Here, interest incomes from fixed deposits on which TDS is deducted will be auto-filled. Also, interest received from income tax refund of previous year will be pre-filled. However, taxpayers should remember to report the interest earned from savings account held with bank/post-office and should claim deduction under Section 80TTA or 80TTB, as the case may be.

Reporting of such incomes are explained with the illustration given below.
For FY 2018-19, Mr A has savings bank interest of Rs 12,000 and fixed deposit interest of Rs 60,000. He has also earned insurance commission of Rs 5,000. Earlier taxpayers were required to disclose only the aggregate amount of income taxable under the head other sources. This year it is mandatory for an assessee to specify the nature of income taxable under the head 'Income from other sources.'

New ITR forms require an assessee to specify the nature of income taxable under the head income from other sources. Further, source-wise bifurcation of interest income has to be reported, i.e., interest from savings bank deposit, fixed deposit and income-tax refund etc.

Taxpayer should remember to claim deduction of up to Rs 10,000 under section 80TTA, in respect of interest on savings bank account, as it's not auto-populated from the above screen where the details of interest on saving deposit have been reported.

For senior citizens, section 80TTB would be applicable for claiming deduction up to Rs. 50,000 for total interest received from bank and/or post office deposits.

D. Tax Details: This tab will be filed with the details of TDS, TCS, Advance tax and self-assessment tax paid by the taxpayer. Though these details are pre-filled from Form 26AS, it is advisable to re-check them with the TDS certificate issued by the deductor (i.e., employer, banks, tenants, etc.)

E. Taxes Paid and Verification: It contains the details of tax payable by, or refund due to, the taxpayer after furnishing of details in the 'Tax Details' tab and tabs of sections 80G and 80GGA deductions. If any tax is found due in this calculation, you should pay the self-assessment tax before the filing of return. Do remember to fill the challan details of such self-assessment tax in Tab D (Tax Details).

In this tab, the individual also needs to enter details of all bank accounts maintained by him. The tax department has clarified that it is not mandatory to provide details of dormant accounts which are not operational for more than 3 years. It is important to note that the bank account mentioned for refund must be linked with PAN. Also, taxpayers are required to pre-validate the bank account at the income tax department's e-filing portal to receive tax refund.

F. Donation-80G: A taxpayer is required to mention the details of the donee and the amount of donations made to the certain notified funds, charitable institutions or other institutions to claim deduction under section 80G. This year, taxpayer is required to specify the amount of donation made in cash and in other mode. Cash donation made in excess of Rs 2,000 shall not be allowed as a deduction from gross total income.


G. Donation-80GGA: Here the taxpayer needs to mention the deduction claimed under section 80GGA. Section 80GGA provides a deduction for donations made towards scientific research/rural development. The deduction is allowed to all assessees other than those who are earning business income.

Step 5: Verify the Form and then Select Preview & Submit
Once all the details in the form have been entered, taxpayer needs to select the verification option. This step is done in the 'Taxes Paid and Verification' tab after mentioning bank account details as mentioned above. Verification of return of income is a mandatory step to complete the filing process. There are six ways to verify your ITR. Click here to know about it.


Step 6: Final Submission of Form
Taxpayer can download the PDF copy for preview. In case of errors or omissions in the form, taxpayer can click on 'Edit' button to make necessary corrections. If details entered are correct, taxpayer may proceed for final submission of the form.

Once final submission is done, SMS and/or email intimation confirming the filing of return shall be received by the taxpayer.

(CA Naveen Wadhwa is DGM, Taxmann.com and CA Tarun Kumar is practising chartered accountant, Taxmann.com)
(Content images source: Taxmann.com)