What are ITR Forms?
Income tax return is a form which is filed with the taxing authority. It reports income, expenses, and other relevant tax information. Tax returns make it easy for taxpayers to determine their tax liability, plan their tax payments and request refunds for its over payment. Taxpayers are required first to determine the type of ITR forms they need to fill before actually submitting the returns. ITR forms are solely dependent on the income of taxpayers.
Income Tax Return (ITR) forms refer to those forms in which taxpayers file information about their income earned and tax applicable to the department of income tax. The department has notified 7 types of ITR forms:
Every taxpayer must know all the ITR forms details and file the ITR before the specified due date to avoid penalties. The applicability of ITR forms depends on the amount of the income earned, sources of income of the taxpayer, and the category the taxpayer belongs to, such as individuals, HUF, and company.
Types of ITR Forms
To know more about ITR forms details let us look at the types of ITR forms. There are various types of ITR forms available for taxpayers to file taxes. Depending on the type/source of income generated, the group of the taxpayer falls under (individual, company, and Hindu Undivided Families). The income of the individual will make the income Tax Returns (ITR) form to be submitted vary.
The following forms are to be taken into consideration by individuals while filing returns as per the Central Board of Direct Taxes in India:
ITR-1 Form or SAHAJ
This form is for resident Indians who fall under the below-mentioned categories:
If income is created from a pension or salary
If income is created from single house property, however, in case the losses have been carried forward from the previous year, the exclusion is allowed.
In case the income is generated from agriculture (not more than Rs.5,000)
The total income produced can be a maximum of Rs.50 lakh and not more
Income that has been created from other sources such as lottery or winning horse races
Who Cannot Opt for this Form?
Individuals who fall under the following groups cannot opt for ITR-1:
If the total income created is more than Rs.50 Lakhs
In case individuals have taxable capital gains
In case income is created from more than one house property
During the financial year, if any investments were made in unlisted equity bonds
If you are an NRI (Non-Resident Indian) or RNOR (Resident Not Ordinary Resident)
In case there is an income produced from agriculture more than Rs.5,000
In case income is produced from profession or business
In case the taxpayer is the director of a company
In case any income is created from a property located abroad
In case an individual possesses foreign income or foreign assets.
ITR 2 Form
ITR-2 form is for individuals and Hindu Undivided Families (HUFs) who fall under any of the following categories:
The income of the taxpayer must be more than Rs.50 lakh
Income can be created via salary or from a pension
Income generated from house property
Income generated from sources such as lottery or horse races
In case the taxpayer is a company’s director
Agricultural income of the taxpayer is higher than Rs.5,000
Revenue produced from capital gains
In case any investments were made in equity bonds unlisted during the financial year
Income is generated from foreign assets and foreign income
Who cannot opt for this form?
Taxpayers who make an income from profession and business cannot opt for ITR 2 form.
ITR 3 Form
This form must be chosen by individual taxpayers and HUFs who make an income from a profession or from owning a business. The following mentioned taxpayers can select the ITR-3 form:
Individuals creating a profit from a business or profession
In case any investments were made in equity shares unlisted at any time during a financial year
In case the taxpayer is a partner in a company
In case the taxpayer is a Director of a company
If income is produced from salary or a pension, house property, or any other source of income
Turnover of the business pension exceeds Rs.2 crore
ITR 4 Form (Sugam)
In the case of individuals, HUFs and Partnership Firms who are residents of India create an income from a business or profession; they must select ITR-4. Limited Liability Partnerships (LLPs) cannot choose this type of ITR form. Taxpayers who have also selected the presumptive income scheme under Section 44ADA, Section 44AD, and Section 44AE of the Income Tax Act 1961, must also choose this form.
Who cannot opt for this form?
The below-mentioned taxpayers and HUFs are not allowed to opt for ITR-4:
In case the gross income generated is higher Rs.50 lakh
In case any losses have been carried forward from previous years
In case the taxpayer has a signing authority at a place outside India
In case any investments were made in equity bonds unlisted at any time during the financial year
In case taxpayers have generated a foreign income or foreign assets
In case the income has been produced from more than one house property
In case the taxpayer is the Director of a company
In case the taxpayer is an NRI or an RNOR
ITR 5 Form
Anyone following under the categories mentioned below can file ITR 5 Form:
Artificial Juridical Person (AJP)
Business trusts
Estate of insolvent
Estate of deceased
Associations of Persons (AOPs)
Body of Individuals (BOIs)
LLPs and companies
ITR 6 Form
ITR-6 is for any company that are not claiming exemptions related to Section 11 of the Income Tax Act, 1961. Firms that are filing income tax returns under this section can only do it electronically.
ITR 7 Form
Individuals and firms that have furnished returns related to Section 139(4A), Section 139(4B), Section 139(4C), Section 139(4D), Section 139(4E) and Section 139(4F) must choose this ITR form.
Listed below are the details of the returns that should be filed section-wise:
Section 139(4A): The ITR forms must be submitted by individuals who gain an income from a property that belongs to a charity/trust or other legal obligations and the income that is produced is solely used for charitable or religious purposes
Section 139(4B): ITR forms must be filed under this section by a political party if the gross income that has been generated is more than the maximum sum
Section 139(4C): ITR forms must be submitted under this section if it is a Scientific Research association, hospitals, medical institutions, universities, funds, News agencies and other educational institutions
Section 139(4D): Any educational institution such as a college or university that are not required to furnish any income or loss must submit ITR forms under this section
Section 139(4E): Business trusts that do not need to furnish any kind of income or loss must file ITR forms under this section
Section 139(4F): Investment funds present under Section 115UB and do not need to furnish any income or losses must also submit ITR forms under this section
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