Depending on the type of income, the category the taxpayer falls under (company, Hindu Undivided Families, individual, etc.), and the income of the individual, the income Tax Returns (ITR) form that must be submitted will vary. In case taxpayers choose the wrong form, they will have to go through the process of filing their ITR again.
Why should an individual file ITR?
In India, it is mandatory for individuals to file ITR in case they fall under the below mentioned categories:
In case the gross income of the individual is more than the details mentioned in the table below:
|Individuals below the age of 60 years||Rs.2.5 lakh|
|Individuals between 60 years and 80 years (Senior Citizens)||Rs.3 lakh|
|Individuals above the age of 80 years (Super Senior Citizens)||Rs.5 lakh|
- In case individuals wish to receive a refund from the Income Tax Department.
- In case individuals wish to apply for a loan or a visa.
- In case individuals have more than one source of income (capital gains, house property, etc.)
- In case individuals have earned an income from foreign assets during the financial year.
Which ITR Form to File when filing Income Tax Return?
Depending on the type of income, the category the taxpayer falls under, and the income the taxpayer makes, the relevant form must be chosen.
|Form||Applicability||Salary||Exempt Income||Capital Gains||House Property||Business Income||Other Sources|
|ITR-1||Resident Indian individuals and HUFs||Yes||Yes. However, income from agriculture cannot be more than Rs.5,000.||No||Yes. However, it can be only for one house property.||No||Yes|
|ITR-2||HUFs and individuals||Yes||Yes||No||Yes||No||Yes|
|ITR-3||Partner in a firm, HUF, or individuals||Yes||Yes||No||Yes||Yes||Yes|
|ITR-4||Firm, HUF, or individual||Yes||Yes. However, income from agriculture cannot be more than Rs.5,000.||Yes||Yes. However, it can be only for one house property.||Only for business income that is presumptive||Yes|
|ITR-5||LLPs or Partnership Firms||No||Yes||No||Yes||Yes||Yes|
Different types of ITR forms:
ITR-1 or SAHAJ
This form must be used by resident Indians who fall under the below-mentioned categories:
- Income is generated from a pension or salary
- Income is generated from a single house property. However, in case the losses have been brought forward from the previous year, exclusion is allowed.
- In case an income of not more than Rs.5,000 is generated from agriculture.
- The total income that is generated can be a maximum of Rs.50 lakh.
- Income that has been generated from other sources such as winning horse races, lottery, etc.
Individuals who fall under the below-mentioned categories cannot opt for ITR-1:
- In case the total income that has been generated is more than Rs.50,000.
- In case individuals have capital gains that are taxable.
- In case income is generated from more than one house property.
- During the financial year, if any investments were present in unlisted equity shares.
- In case you are a Non-Resident Indian (NRI) and Resident Not Ordinary Resident (RNOR).
- In case income that is generated from agriculture is more than Rs.5,000.
- In case income is generated from profession or business.
- In case the individual is the director of a company.
- In case any income is generated from a property that is located outside India.
- In case an individual has foreign assets or foreign income.
ITR-2 form must be used by individuals and Hindu Undivided Families (HUFs) who fall under the below-mentioned categories:
- Income of the individual must be more than Rs.50 lakh.
- Income can be generated via a pension or from salary.
- Income that is generated from house property.
- Income that is generated from winning a lottery or horse races.
- In case the individual is the Director of a company.
- Agricultural income of the individual is more than Rs.5,000.
- Income has been generated from capital gains.
- In case any investments were present in equity shares that were unlisted during the financial year.
- Income is generated from foreign income and foreign assets.
Individuals who make an income from profession and business can opt for the form.
This form must be chosen by individuals and HUFs who make an income from a profession or from a proprietorship business. The below mentioned individuals can opt for the ITR-3 form:
- Individuals who are generating an income from a profession or business.
- In case any investments were present in equity shares that were unlisted at any time during the financial year.
- In case the individual is a partner in a firm.
- In case the individual is a Director of a company.
- If income is generated from a pension or salary, house property, or any other source of income.
- Turnover of the business exceeds Rs.2 crore.
ITR-4 or Sugam
In case HUFs, Partnership Firms, and individuals who are Indian residents generate an income from a profession or business, they must opt for ITR-4. However, Limited Liability Partnerships (LLPs) cannot opt for this form. Individuals who have also chosen the presumptive income scheme according to Section 44AD, Section 44ADA, and Section 44AE of the Income Tax Act 1961, should also opt for this form.Who cannot opt for this form?
The below-mentioned individuals and HUFs are not allowed to opt for ITR-4:
- In case the total income that has been generated is more Rs.50 lakh.
- In case any losses have been brought forward from previous years.
- In case the individual has a signing authority at a place that is not located in India.
- In case any investments are present in equity shares that are unlisted at any time during the financial year.
- In case individuals have foreign assets or have generated a foreign income.
- In case the income has been generated from more than one house property.
- In case the individual is a Director of a company.
- In case the individual is a non-resident or an RNOR.
Investment funds, Business trusts, Estate of insolvent, Estate of deceased, Artificial Juridical Person (AJP), Body of Individuals (BOIs), Associations of Persons (AOPs), LLPs, and firms must opt for ITR-5 form.
ITR-6, For any companies that are not claiming exemptions under Section 11, this form must be chosen. Companies that are filing returns under this section can only do it electronically.
ITR-7, Individuals and companies that have furnished returns under Section 139(4A), Section 139(4B), Section 139(4C), Section 139(4D), Section 139(4E), or Section 139(4F) must opt for this form. Given below are the details of the returns that must be filed under each section:
- Section 139(4A): The returns must be filed by individuals who receive an income from a property that belongs to a trust or other legal obligations and the income that is generated is solely used for religious or charitable purposes.
- Section 139(4B): Returns must be filed under this section by a political party if the total income that has been generated is more than the maximum amount.
- Section 139(4C): Returns must be filed under this section by the below-mentioned entities:
- Scientific Research association
- Institutions or association that come under Section 10(23A)
- Medical institutions, hospitals, universities, funds, and other educational institutions.
- News agencies
- Institutions that come under Section 10(23B)
- Section 139(4D): Any college, university, or other institutions that are not required to furnish any income or loss must file returns under this section.
- Section 139(4E): Business trusts that are not required to furnish their income or loss must file their returns under this section.
- Section 139(4F): Investment funds that are present under Section 115UB and are not required to furnish any income or losses must file returns under this section.
Where can individuals download the various forms?
Individuals will be able to download the various ITR forms on the official website of the Income Tax Department https://www.incometaxindia.gov.in/pages/downloads/income-tax-return.aspx). The forms will be available in the PDF format and the instructions to fill the form will also be available on the same website.
Depending on the type of income that individuals make, they can either opt for ITR-1, ITR-2, ITR-3, ITR-4, and ITR-7. The Income Tax Returns can be file on the official website of Income Tax Department (https://www.incometaxindiaefiling.gov.in/home) and the process to file the returns is simple.
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