ITR Filing Big Update: ITR-1 is the easiest form among the various Income Tax Return forms issued by the Income Tax Department. At times, ITR-1 is filed as a standard ITR form by taxpayers without understanding their eligibility to file the correct ITR form.
This must have been due to various misconceptions especially with regard to income tax rules. Tax Deduction at Source (TDS) is one such rule that an income earner should be aware of while choosing his ITR form.
On how the TDS rule works while choosing the right ITR form, a tax and investment expert said, “If a taxpayer has made a cash withdrawal of Rs 1 crore or more, then under section 194N of the Income Tax Act, 1961, A taxpayer will not be able to file Income Tax Return through Form-1. However, if the earner has not filed ITR in the last three financial years, the applicable TDS limit will be Rs 20 lakh instead of Rs 1 crore.
SEBI registered tax and investment expert said “If the taxpayer has exceeded the cash withdrawal limit under section 194N then in that case the bank will deduct TDS under this section.” When asked which ITR form a taxpayer can use for deducting TDS under section 194N? The expert said, “If TDS is deducted under section 194N, then in that case taxpayers will have to use ITR-2 instead of ITR-1.”
The due date for filing ITR for the financial year 2021-22 and assessment year 2022-23 is 31 July 2022.
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