How to e-file ITR 1 (SAHAJ) with rental income

ITR-1 is one of the income tax return (ITR) forms that are used by the resident individuals whose

• Total income does not exceed Rs 50 lakh in a financial year
• Taxable income includes income from salary, one house property, family pension income, agricultural income (up to Rs 5000), and other sources like-
  1. Interest from Savings Accounts
  2. Interest from Deposits (Bank / Post Office / Cooperative Society)
  3. Interest from Income Tax Refund
  4. Interest received on Enhanced Compensation
  5. Any other Interest Income
  6. Family Pension
• Income has been clubbed with that of the spouse or a minor child

The income tax department has recently launched a new income tax portal to simplify ITR filing for taxpayers in India. If you are a resident individual and your total income for FY 2020-21 includes income from sources mentioned above, you should file ITR-1 by 30th September 2021.

In this article, we will discuss the step-by-step process of filing ITR using the ITR-1 form with rental income from one house property.

What is income from house property?

Any income arising from a house property i.e. rental income is considered ‘Income from House Property’ under the income tax act. The house property here means a house, building, office, and warehouse. There are different ways to calculate taxable income from house property based on it’s type - self-occupied and let out.

Self-occupied property is the one that is used for one’s residential purpose. And, a let out property is the one that has been rented out to a tenant even for a few months. In the next step, we will guide you about how to calculate taxable rental income from a let-out property and file your ITR accurately.

How is income from house property calculated?

You will have to fulfil 3 conditions for an income to be taxed as ‘Income from House Property’.

• The house should be a building, land or an apartment
• You should own the property, and
• The house property should not be used for any business purposes carried on by the taxpayer.

Suppose all the 3 conditions are satisfied for a house property & you have given such property on rent even for a short period for FY 2020-21. In that case, you will have to calculate the taxable income from the property, pay tax & report it in your ITR. Here are the steps to calculate taxable income from let-out or rented house property.

• Step 1: Calculate the annual rent received
• Step 2: Deduct municipal taxes paid by you during the year, and you will arrive at NAV (Net Annual Value) of your house property
• Step 3: Then, deduct 30% of NAV as standard deduction and interest on housing loan (if any) from the NAV, and the resultant amount will be your taxable income

How to e-file ITR 1 with rental income from house property?

Once you have calculated the taxable income, follow these steps to file your ITR-1 with rental income from house property.

• Step 1: Visit the new income tax portal
• Step 2: Log in using your username (PAN) & password
• Step 3: On the dashboard, click on e-file -> Income Tax Returns -> File Income Tax Return
• Step 4: On the next page, select the Assessment year 2020-21 and click on 'Continue'
• Step 5: Then, select the online mode of filing and click on 'Proceed'
• Step 6: In the next step, choose ITR-1 from the drop-down menu to file your ITR with rental income from house property
• Step 7: Once you have selected the ITR form, go through the list of documents required and click on 'Let's get started'
• Step 8: Select the checkbox applicable to you on the next page and click on 'Continue'
• Step 9: Verify your pre-filled details and edit if necessary. Also, enter the remaining information related to your house property rental income. Then, click on ‘Continue’ at the end of each section
• Step 10: After you confirm the details of the ‘Personal Information’ section, select ‘Gross Total Income’ and scroll down to ‘Income from House Property’ and click on ‘Add/edit details of breakup’
• Step 11: Then, select the type of house property as let out from the drop-down menu and enter the details like total rent, municipal taxes paid, interest on housing loan (if any) & click on ‘Add’
• Step 12: Confirm the income details on the next screen, then enter deductions (if any) and confirm all the sections to know your tax liability
• Step 13: Pay your taxes if there is a tax liability based on the computation. Then click on ‘Review Tax Return’.
• Step 14: Post that, you will be taken to the ‘Proceed to Validation’ page. Enter the required details and click on ‘Proceed to Verificatio
• Step 15: Verify your ITR using any of the options and click on ‘Continue’. We strongly recommend you to use the e-verify now option. This will fasten your ITR processing.
• Step 16: Congratulations! At this point, your ITR has been successfully filed.