Income Tax Returns and its Types | ITR Filing | LawWiser

08/07/2024 Taxation By LawWiser

Tax filing season is here and to clear your confusion, we’re here to demystify the various types of Income Tax Return, or ITR, forms available to Indian taxpayers. Whether you’re an individual or part of an organisation, knowing which form to file can save you time and ensure compliance. Let’s dive right in.

There are seven different types of ITR forms designed to cater to different types of taxpayers, depending on their income sources and total income.

Let’s take a closer look at each one –

(i) First up, we have ITR-1, also known as Sahaj. This form is for individuals with:
– Income from salary or pension
– Income from other sources, excluding winnings from lotteries or horse racing
– Agricultural income less than Rs. 5,000
– Income from a single house property, with certain exclusions If you fall into any of these categories, ITR-1 is for you

(ii) ITR-2 is for individuals and Hindu United Families, or HUFs, with:
– Total income exceeding Rs. 50 lakh
– Income from salary, pensions, capital gains, and other sources
– Income from foreign assets
– Agricultural income exceeding Rs. 5,000

(iii) Now, let’s talk about ITR-3. This form is suitable for individuals and HUFs who:
– Earn income from a business or profession
– Are partners in a firm
– Have income from salary, pension, capital gains, and other sources
– Hold investments in unlisted equity shares
– Are individual directors in a company If you meet any of these criteria, ITR-3 is the right choice for you.

(iv) Moving on to ITR-4, also known as Sugam. This form is for individuals, HUFs, and firms with:
– Total income up to Rs. 50 lakh from business or profession
– Income reported under the presumptive income scheme under sections 44AD, 44ADA, and 44AE of the Income Tax Act
– If you prefer the presumptive taxation scheme, ITR-4 is your go-to form.

(v) ITR-5 is designed for various entities such as:
– Firms
– Body of Individuals
– Co-operative societies
– Limited Liability Partnerships
– Association of Persons
– Local authorities
– Artificial Judicial Persons
– Estates of insolvent or deceased individuals
– Business trusts
– Also Note that this form is not for individual citizens.

(vi) ITR-6 is exclusively for companies that do not claim an exemption under Section 11, which pertains to income from religious or charitable properties. Companies must file this form electronically.

(vii) Finally, we have ITR-7. This form is for entities filing under specific sections of the Income Tax Act, including:
– Section 139(4A): Charitable or religious properties
– Section 139(4B): Political parties
– Section 139(4C): Institutions like medical, educational, and scientific research establishments
– Section 139(4D): Colleges and universities, where income and losses are not reported as per this section’s rules

Understanding which ITR form to use is crucial for a smooth tax filing process. Make sure to choose the correct form based on your income sources and organizational structure. If you have any doubts, consulting with a tax professional can be a great help.

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