Joint property owners can file income tax return using this forms.

The income tax department permits joint owners of single house property to file the income tax return by simply using Form-1 (Sahaj) or Form-4 (Sugam).

On 3 January, the taxpayers who had owned a house in joint ownership were debarred, and those who had paid Rs 1 lakh of electricity billed in a year or upheld Rs 2 lakh of expenses for foreign travel from filing their annual income return using the simple return forms.

The Central Board of Direct Taxes (CBDT) said in a statement that “after the notice, concerns were raised that the amendments were likely to cause inconvenience for individual taxpayers.”

According to the statement, the query has been examined and it “is decided that a person owning one house in joint ownership will be allowed, to file the income tax return in ITR-1 or ITR-4 form, if he or she meets the other conditions.”

“It was also agreed that, in order to comply with one or more conditions stated under the seventh proviso to section 139(1) of the Act, a person obliged to file a return must be allowed to file his/her return in the ITR-1 form,” it added.

The government, which normally notifies forms for filing individuals’ income tax returns in April each year, notified tax return forms for the assessment year 2020-21 on January 3 (income earning year April 1, 2019, to March 31, 2020).

Returns in ITR-1 Sahaj can be filed by the ordinary person with a total income of Rs 50 lakh, but for resident individuals, HUFs, and companies (other than LLPs), with total earnings of up to Rs 50 lakh and with presumptive income from business and profession can be filed with ITR-4 Sugam.

Two major changes in the ITR forms took place on January 3 – first, if an individual taxpayer is a joint owner of house property he or she cannot file return either in ITR-1 or ITR4. Secondly, it says that the ITR-1 form is not valid for those individuals who have deposited more than Rs 1 crore in a bank account or for foreign travel or electricity, have incurred Rs 2 lakh or Rs 1 lakh. Such taxpayers used various forms, which was told in due course.

The CBDT stated that it was notified on January 3 that the e-filing utility for filing return for assessment year (AY) 2020-21 would be available as of April 1, 2020, the Income-Tax Return (ITR) forms ITR-1 (Sahaj) and ITR-4 (Sugam).

The eligibility requirements for ITR-1 and ITR-4 forms were altered in the notified returns with a view to maintaining these forms short and simple with a minimal number of schedules. A person who owns a property in joint ownership has therefore not been made eligible to file the ITR-1 or ITR-4 forms.

“For the same reason, the person who is not otherwise required by the seventh proviso to section 139(1) of the Income Tax Act 1961 (the Act), but is eligible by fulfilment of one or more conditions to file the return has also failed to qualify for ITR-1 form in the same manner,” it said.

After the notification, concerns were raised that the modifications in the actual taxpayers’ position are likely to cause difficulties.