Types of Income Tax Return (ITR) Forms

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An Income Tax Return (ITR) is a form that taxpayers use to report their income and the applicable taxes to the Income Tax Department. Various types of return in income tax forms are available for different categories of taxpayers.

A taxpayer can file taxes using one of nearly nine different ITR form types. However, as per the Central Board of Direct Taxes in India, only the following forms should be used by people to submit returns.

Different Types of ITR forms

Let us examine the different ITR forms to learn more about their specifics. Taxpayers can file their taxes using a variety of ITR form types. The category that the taxpayer belongs to depends on the kind of income and its source (individual, company, and Hindu Undivided Families). The Income Tax Return (ITR) form must be submitted will vary depending on the individual.

ITR 1 or SAHAJ

ITR 1 form is used if your income is earned through a salary or pension. Additionally, if you have income from house property or other sources, excluding lottery winnings or income earned through horseracing, you need to file this ITR form.

You cannot file using this form when your annual income exceeds ₹50 lakhs or your foreign assets. Moreover, the form may not be used for taxable capital gains, income from multiple properties, agricultural income exceeding ₹5,000, or income from a profession or business.

ITR 2

If your annual income from house property, salary or pension, or other sources exceeds ₹50 lakhs, you must file your ITR using the ITR 2 form. If you club the income of your spouse or children with your annual income, you must file income tax using Form 2. However, this form will not be used if your income includes professional or business earnings.

ITR 2A

People who have accrued income from the sale of assets or property typically use the ITR-2 Form kind of ITR form. Additionally, this form is helpful for those who receive income from sources outside of India. This form can often be used by individuals or Hindu Undivided Families (HUF) to file their IT returns.

ITR 3

An individual who earns an income from carrying on a profession or business is eligible to file income tax using ITR Form 3. The form may also be used if your earnings include income from pension, salary, or other sources.

ITR 4 or SUGAM

When you opt for the presumptive income scheme under sections 44AD, 44ADA, and 44AE, you must use ITR Form 4 to file your income tax ITR. However, if your total annual turnover is more than ₹2 crore, you must file your income tax using Form 3.

ITR 4A

Any person or Hindu Undivided Family (HUF) may file their income tax returns using the ITR-4S form, also known as the Sugam form. This form is helpful in unique situations and applies to businesses whose income is determined using a presumptive method.

ITR 5

ITR Form 5 is used to file income tax returns by limited liability partnerships (LLPs), bodies of individuals (BOIs), and associations of persons (AOPs).

ITR 6

Companies not exempt under section 11 must file Form 6 electronically. This section offers guidelines for income from property held for religious or charitable uses.

ITR 7

This is the ITR type for a company or individual that must furnish income tax ITR under sections 139 (4A), 139 (4B), 139 (4C), and 139 (4D) and must file returns using Form 7. In addition, you may easily file your ITR form online, also known as e-filing, which makes the entire procedure simple, quick, and hassle-free.

Which ITR Form to File and Who is Eligible?

Filing your Income Tax Return (ITR) can seem daunting, especially when unsure which form to choose. Different types of income tax return forms cater to different requirements, depending on the sources of income and the amount earned. Below, we break down the various ITR forms and their eligibility criteria in an easy-to-understand table to help you identify the right one for your needs.

Why Should You File an ITR?

If any of the following circumstances apply to you, filing income tax returns (ITR) in India is required. If your annual gross income exceeds the basic exemption amount listed below:

Deposited more than ₹1 Crore in a ‘Current’ Bank Account

Mandatory filing is required if the cumulative deposits in one or more current accounts with a bank amount to ₹1 crore or above. Note that this requirement does not extend to deposits made in post office current accounts.

Deposited more than ₹50 Lakh in a ‘Savings’ Bank Account

Filing is compulsory if the total deposits in one or more savings bank accounts reach ₹50 lakh or more.

Spent more than ₹2 Lakh on Foreign Travel

Mandatory filing is applicable if your total expenditure on foreign travel, whether for yourself or another individual, exceeds ₹2 lakh.

Electricity Expenditure is more than ₹1 Lakh

Filing is obligatory if the expenditure on electricity consumption crosses ₹1 lakh during the previous year.

TDS or TCS is more than ₹25,000

If the total Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) surpasses ₹25,000 in the previous year, filing becomes mandatory. For senior citizens (above 60 years), this limit is ₹50,000.

Business Turnover is more than ₹60 lakh

Businesspersons with total sales, turnover, or gross receipts exceeding ₹60 lakh during the previous year must file their tax return.

Professional Income is more than ₹10 lakh

The filing requirement applies to individuals engaged in a profession whose gross receipts amount to more than ₹10 lakh during the previous year.

How You Can File Returns Online?

Filing tax returns is an essential financial responsibility, and in the digital age, the process has become more accessible than ever. Online tax filing offers convenience, speed, and accuracy, empowering individuals to manage their financial obligations efficiently.

Know the Basic Rules

Before you file your returns online, you must understand the basic rules and changes that may have been made for the current year. You must also know the tax rates to calculate your tax liability accurately.

Modifications to the ITR Form Types

The Income Tax Department has modified the various forms of return in the current year. Understanding these changes before you file your returns online will ensure you can complete the procedure without any trouble.

Decide the Appropriate ITR Form

There are multiple forms; you must know which one you must file. You must read the rules and regulations to know the form to file your income tax return.

Verify Form 26AS

You should verify the details of the tax credit statement (Form 26AS) are accurate. This form details the tax your employers and others deducted at source (TDS).

Missed-out Deductions

The Income Tax Act provides several tax benefits and deductions. Taking advantage of the income tax deductions would minimize your tax liability.

Once you file the returns online with digital copies of the required documents, you must verify the same. Failing to do so renders the filing incomplete, and you may have to pay the penalty for late filing.

Wrapping Up

Selecting the correct ITR form is essential to ensure accurate and timely filing of tax returns. Understanding the basics of each form empowers taxpayers to navigate tax filing efficiently. Whether you are an individual with a simple income structure or a business entity with diverse revenue streams, choosing the right ITR form ensures compliance with tax regulations and facilitates a smooth filing process. As tax laws evolve, staying informed about the specific requirements of each ITR form is key to maintaining financial transparency and meeting your tax obligations effectively.

FAQs on Types of ITR