What are the types of income that shall not form part of ITR 1 form?

The Income Tax Return (ITR) form ITR-1, also known as Sahaj, is meant for individuals with relatively simple income situations. However, certain types of income must not be reported on this form. Below are the types of income that are excluded from ITR-1:

Types of Income Not Included in ITR-1

1. Profits and Gains from Business and Professions: Any income derived from business activities or professional services cannot be reported on ITR-1.
2. Capital Gains: Income from the sale of capital assets, whether short-term or long-term, is not covered under ITR-1.
3. Income from More Than One House Property: If an individual owns and earns income from more than one house property, they cannot use ITR-1 to file their tax returns.
4. Specific Types of Income Under ‘Other Sources’:
   • Winnings from Lottery: Any income from lotteries is excluded from ITR-1.
   • Income from Race Horses: Earnings from owning and maintaining race horses are not to be included.
   • Income Taxable at Special Rates: Income taxable at special rates under sections 115BBDA (dividend income above a certain threshold) and 115BBE (income from other sources, such as unexplained cash credits) must be reported using a different ITR form.
5. Income Apportioned Under Section 5A: Income that needs to be apportioned according to the provisions of Section 5A of the Income Tax Act, applicable to specific cases like community property law, cannot be included in ITR-1.

Also Read: What documents do I need to file ITR-1?

Conclusion

ITR-1 is intended for individuals with straightforward income scenarios, primarily from salary, one house property, and other simple sources. For more complex financial situations, including those listed above, taxpayers should use alternative ITR forms to ensure proper compliance and reporting.