Individuals having income from salary/ pension/ family pension and interest can file their tax return on ITR-1. This is the simplest form among all the options present for individual taxpayers. Return forms are prescribed for a specific year and it is important to fill the right form. It might get rejected otherwise.
The actual financial year for which the income is calculated is called the previous year and the year after this is known as the assessment year. This means that the return is being filed for the year 2007-08 and the Assessment year is 2008-09. This is the year that the person has to look at while they are filing their returns. This is mentioned on the top right half of the first page.
This includes the name and address along with the Permanent Account Number (PAN), date of birth and contact details. The taxpayer has to select the employer category from among government/ public sector undertaking/ others. If you are in the private sector then the category to tick is ‘others’.
Income and deductions
The first income to mention is the income from salaries. There is just one box to mention the entire income from salaries and here the net income from salaries figure should be given.
This will be available from the Form 16 given to the employee who is filing the return. In case a person has worked at more than one place during the year then the total net income from both the places would have to be added together and mentioned as a single figure.
The other income that can be mentioned is income from two sources: pension and interest earnings. Interest from bank savings account, bank deposits etc. can be added to the form. Once all the income is mentioned, they are to be added up under the head of gross total income.
There are various deductions available in the form of investments in specified instruments (Section 80C) or payment of insurance premium (Section 80D) or donations (Section 80G) and so on.
Taxes computation and taxes paid
Once the deductions are calculated then the total income is arrived at and also the tax and education cess on the amount is found. The tax to be paid is reduced by the various taxes that have been already paid.
There is space for a tax deduction at source (TDS), which will take care of a larger part of the tax payment. There is also an advance tax or self-assessment tax to mention the remaining part of the tax payment. After this either an additional tax payable or a refund will be present.