A salaried individual can file his tax return using ITR-1 or ITR-2. It is important to ensure that the tax return is filed using the correct form. Filing ITR using wrong tax return form will lead to faulty ITR filing. The tax department will send you a tax notice asking you to file ITR using the correct form. The form you need to use to file ITR will depend on your sources of income during the financial year.
Who can file tax return using ITR-1 form?
Salaried individuals can file their tax return using ITR-1 form if they fulfill the following conditions:
a) The total income of an individual should not exceed Rs 50 lakh
b) His source of income should be salary, a house property and other sources of income, i.e. interest income, dividend etc. and agricultural income up to Rs.5,000 only.
c) The person should ordinarily be a resident Indian
If a salaried person fulfills the above conditions, he/she can file tax return using ITR-1 form. However, if a salaried individual has income from any other source such as capital gains, foreign income etc. or is a non-resident individual, he cannot file tax return using ITR-1.
Read also:
Who cannot file Income Tax Return using ITR-1?
Who can file tax return using ITR-2 form?
A salaried person can file his tax return using ITR-2 form if he:
a) is a director of a company
b) is investing in unlisted equity shares
c) is income from salary, more than one house property, capital asset, foreign income and other sources of income
d) Holds property outside India
e) Total income is more than Rs 50 lakh
f) Hindu Undivided Family (HUF)
g) is a non-resident person or a resident person (both ordinarily or not ordinarily)
h) If there are losses which should be carried forward or brought forward under the head ‘Income from house property’.
Thus, if a salaried person has income from salary and capital gains, he/she has to file income tax return using ITR-2 form.
Read also:
Which ITR form is applicable for you for FY 2021-22,