The process of filing Income Tax Return (ITR) has commenced, and individuals are actively submitting their returns. It is crucial for individuals with taxable income in India to fulfill their obligation of filing an income tax return.
When filing an income tax return, it is essential to consider certain factors. Different forms are utilized for filing income tax returns, and it is important to choose the appropriate form based on the requirements. Let’s familiarize ourselves with these forms.
While there are approximately 9 types of ITR forms available for taxpayers, the Central Board of Direct Taxes in India advises individuals to pay attention to the following forms when filing their returns:
ITR-1
ITR 2
ITR-2A
ITR 3
ITR 4
ITR 4S
The following income tax return forms are applicable only for companies and firms:
ITR-5
ITR-6
ITR-7
ITR-1
This form is exclusively for individual taxpayers. It is not applicable for any other assesses liable to pay tax. ITR-1 is suitable for the following individuals:
- Those earning income from salary or pension.
- Individuals with a single house property as their source of livelihood.
- Those without any income from business or capital gains.
- Individuals who don’t have property or assets outside India.
- Those without any income from foreign countries.
- Individuals with agriculture income below Rs. 5,000.
- People earning income from investments like fixed deposits or schemes.
- Individuals who haven’t received windfall gains from activities such as lotteries or horse races.
- Individuals who want to club their income with that of their spouse or minor child, as per the mentioned criteria.
ITR-2A
This form was introduced in the assessment year 2015-16. It can be used by both Hindu Undivided Families (HUFs) and individual taxpayers. ITR-2A is applicable to the following individuals:
- Those whose income comes from salary or pension.
- People earning income from more than one house property.
- Individuals without any income from business or capital gains.
- Those with income from investments such as fixed deposits, shares, etc.
- Individuals without property or assets outside India.
- People with no income from foreign countries.
- Individuals with agriculture income below Rs. 5,000.
- Those who haven’t received windfall gains from activities like lotteries or horse races.
ITR-2
This form is suitable for individuals who have earned income through the sale of property or assets. It is also useful for individuals who earn income from countries outside India. Generally, individuals or Hindu Undivided Families (HUFs) can use this form to file their IT returns.
ITR-3
The ITR-3 form is beneficial for individual taxpayers or HUFs who work as partners in a firm but do not engage in any business under the firm’s name. It is also applicable to individuals who do not earn any income from the business carried out by the firm. Taxpayers filing this form usually have taxable income earned from business in the form of salary, commission, bonus, interest, or remuneration.
ITR-4
This form is designed for individuals engaged in business or those earning income through a profession. It applies to all types of businesses, undertakings, or professions without any limitation on the income earned. Taxpayers can combine income from windfall profits, speculation, salary, lottery, residential properties, and more with the income earned from their business. Individuals in various professions, such as shopkeepers, doctors, designers, agents, retailers, and contractors, are eligible to file their ITR using this form.
ITR-4S
This form, also known as the Sugam form, can be used by individuals or Hindu Undivided Families (HUFs) to file their income tax return. It is applicable to the following individuals:
- Those earning income from any business.
- Individuals earning income from a single house property.
- Individuals who do not earn income from the sale of property or assets in India, such as capital gains.
- Individuals whose income from agriculture is less than Rs. 5,000.
- Individuals who do not have any property or assets in countries other than India.
- Individuals who do not earn income from any country outside India.
- This form is particularly useful in special circumstances and applies to businesses where income is computed using the estimated method.
ITR-5
The ITR-5 form is used for filing income tax return by various entities, including:
- Firms
- Limited Liability Partnerships (LLPs)
- Body of Individuals (BOI)
- Association of Persons (AOP)
- Cooperative Societies
- Artificial Juridical Persons
- Local Authorities
ITR-6
The ITR-6 form is specifically for companies, except those organizations that claim tax exemption under section 11. Section 11 allows tax exemption for organizations that accumulate income from property used for religious or charitable purposes. The ITR-6 form is available for online filing only and serves as a special income tax return form for such companies.
ITR-7
For certain individuals or companies, filing their income tax return through ITR-7 is necessary. Let’s understand the sections under which this form is applicable:
- Section 139(4A): This section applies to individuals who receive income from property held in the form of a trust or legal obligation for charitable or religious purposes. If you fall under this category, you are required to file your return using ITR-7.
- Section 139(4B): Political parties need to file their returns under this section, provided their total income exceeds the non-taxable limit. If you belong to a political party and meet the income criteria, you must file your return using ITR-7.
- Section 139(4D): Under this section, colleges, universities, and similar institutions that are not required to file a return of income or loss according to other provisions mentioned in this section must use ITR-7 to file their returns.
- Section 139(4C): Returns are to be filed by the following entities under this section:
- Institutions or associations specified under section 10(23A).
- Associations engaged in scientific research.
- Institutions referred to in section 10(23B).
- News agencies.
- Funds, medical institutions, or educational institutions.
- If you are part of any of the entities mentioned above, it is man
