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 e-file ITR 1 with rental income
  • Step 4: On the next page, select the Assessment year 2020-21 and click on 'Continue' e-file ITR 1 with rental income
  • Step 5: Then, select the online mode of filing and click on 'Proceed' e-file ITR 1 with rental income
  • Step 6: In the next step, choose ITR-1 from the drop-down menu to file your ITR with rental income from house property e-file ITR 1 with rental income
  • Step 7: Once you have selected the ITR form, go through the list of documents required and click on 'Let's get started' e-file ITR 1 with rental income
  • Step 8: Select the checkbox applicable to you on the next page and click on 'Continue' e-file ITR 1 with rental income
  • 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 e-file ITR 1 with rental income
  • 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’ e-file ITR 1 with rental income
  • 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’ e-file ITR 1 with rental income
  • 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 e-file ITR 1 with rental income
  • 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. e-file ITR 1 with rental income
  • Step 16: Congratulations! At this point, your ITR has been successfully filed. e-file ITR 1 with rental income
CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.