However, a week later, on January 9, the CBDT rolled back its order, allowing joint owners of single house property and other taxpayers mentioned above to file income tax return using the ITR-1 form.
Restrictions announced by CBDT in its January 3 notification
The new notified ITR1 form asks for various details from taxpayers such as passport number (if available), tenant details (if available), complete details of employer and so on.
Further, as per the notified forms on January 3, individuals who own a single house property jointly or individuals who satisfy conditions under seventh proviso of section 139(1) of the Income Tax Act will not be allowed to use ITR-1 to file their return.
The seventh proviso of section 139(1) covers those individuals – (a) who have deposited more than Rs 1 crore in one or more current accounts in the FY 2019-20, (b) who have spent more than Rs 2 lakh on foreign travel on him/herself or any other person and (c) those who have paid more than Rs 1 lakh as electricity bill in FY 2019-20.
What was rolled back in CBDT’s January 9 press release?
According to the January 9 press release, “After the aforesaid notification, concerns have been raised that the changes are likely to cause hardship in the case of individual taxpayers. The taxpayers with jointly owned property have expressed concern that they will now need to file a detailed ITR Form instead of a simple ITR-1 and ITR-4. Similarly, persons who are required to file return as per the seventh proviso to section 139(1) of the Act, and are otherwise eligible to file ITR-1, have also expressed concern that they will not be able to opt for a simpler ITR-1 Form.”
Due to this, CBDT decided to roll back the restriction on those owning single house property jointly.
The question now arises that with these revised eligibility criteria, who can use ITR-1 to file tax returns for FY 2019-20.
Who can file tax return using ITR1 for FY 2019-20?
As per the notified forms and latest clarification from the income tax department, ITR1 can be used by the following individuals:
- Resident individuals whose total income does not exceed Rs 50 lakh;
- Sources of income should be salary, house property, interest income, family pension etc.;
- Individuals who have spent more than Rs 2 lakh on foreign travel on himself/herself or any other person in FY 2019-20;
- Individuals who have deposited more than Rs 1 crore in one or more current account in FY 2019-20;
- Individuals who have paid more than Rs 1 lakh as electricity bill in FY 2019-20;
- Individuals having one house property irrespective of ownership status, i.e., single house property either owned fully or jointly with someone.
Who cannot file tax-return using ITR1 for FY 2019-20?
CBDT is yet to notify the ITR forms for individuals who are not eligible for ITR-1. However, after the roll-back, it seems the eligibility condition for ITR-1 of FY 2019-20 is the same as that for the previous year.
Archit Gupta, Founder and CEO, ClearTax says, “With the roll back, the new ITR-1 form does not have any changes except seeking of passport information. Hopefully these forms will not be revised any further and online facility will be launched soon.”
Here is a look at who cannot use ITR1 for FY 2019-20:
- Individuals who are non-resident or not ordinarily resident. The income tax law applicable for the individual is based on the residency condition satisfied by him/her. Click here to read the residency conditions;
- Resident individuals whose total income exceeds Rs 50 lakh;
- Individuals who have incurred capital gains- either short-term or long-term or both;
- Individuals who are directors in a company;
- Individuals who have invested in unlisted equity shares;
- Individuals who have to carry forward losses under the head ‘Income from house property’;
- Individuals who have more than one house property;
- Individuals having sources of income other than interest like dividend income.