When the time comes to file your taxes, completing your ITR form can be daunting, particularly if you have little to no knowledge of which form you need. You may wonder, “What is ITR, and why, in the world, are there so many forms?” ITR full form is Income Tax Return, which means the government has split the taxpayers into different categories depending on the source of their income, type of business, and other financial activities they conduct.
Determining the correct income tax return form selection is of utmost importance, as making the wrong choice will lead to your return being declined, resulting in penalties and further complications. But there is no need to panic! With the correct guidance, anyone can stress less about tax time as we break down everything, making it simple and manageable to file your taxes.
Before diving into the ITR forms list, let’s first understand "ITR meaning." An income tax return form is a return document on your income that you submit to the government's taxing authority. One of the primary functions of income tax returns is to assist the administration in assessing if the stakeholder needs to be taxed further or is entitled to a refund.
In India, there are seven different ITR forms, and choosing the right one depends on various factors:
The types of Income Tax Return forms in India are as follows:
ITR Form | Applicable To | Key Features |
---|---|---|
ITR-1 (Sahaj) | Resident Individuals with income up to ₹50 lakh | For salaried individuals, pensioners, and those with income from one house property and interest income |
ITR-2 | Individuals & Hindu Undivided Families (HUFs) | For those earning above ₹50 lakh, capital gains, multiple house properties, or foreign income/assets |
ITR-3 | Business Owners & Professionals | For individuals running a business, self-employed professionals, and company directors |
ITR-4 (Sugam) | Small Business Owners & Freelancers | For individuals and entities with presumptive tax income under sections 44AD, 44ADA, or 44AE |
ITR-5 | Partnership Firms, LLPs, AOPs, BOIs | For firms, associations, and business trusts (except companies) |
ITR-6 | Companies (excluding those claiming exemptions under Section 11) | For Private, Public Limited, and 1 Person Companies |
ITR-7 | Trusts, NGOs, Political Parties, Educational & Scientific Institutions | For entities filing under Sections 139(4A) to 139(4F) |
It is important to select the correct form while filing your tax returns. For each category of taxpayer, their sources of income, and earnings, the Income Tax Department has designed different types of ITR forms. Let’s see how each form is outlined and who falls under that category.
Who Can File ITR-1? | Who Cannot File ITR-1? |
---|---|
Resident people with total income up to ₹50 lakh | Non Resident Indians and Hindu Undivided Families |
Salary or pension income | Individuals earning more than ₹50 lakh annually |
Income from one house property (excluding brought forward losses) | Individuals with capital gains from stocks, real estate, or funds |
Interest income from savings accounts, fixed deposits, etc. (excluding lottery and horse race earnings) | Business owners or professionals with self-employment income |
Individuals with foreign assets or foreign income |
Who Can File ITR-2? | Who Cannot File ITR-2? |
---|---|
Salaried individuals earning more than ₹50 lakh | Individuals earning business or professional income (they must file ITR-3) |
Individuals with multiple house properties | |
Individuals earning capital gains from stocks, real estate, or funds | |
Those with foreign assets and foreign income | |
Agricultural income above ₹5,000 | |
Company directors or investors in unlisted shares |
Who Can File ITR-3? | Who Cannot File ITR-3? |
---|---|
Business owners and self employed professionals (doctors, lawyers, freelancers, etc.) | Salaried individuals with only one source of income (they should file ITR-1 or ITR-2) |
Individuals earning from salary, pension, or rental income | |
Individuals earning from capital gains, lottery winnings, or other income sources | |
Company directors | |
Business owners with a turnover exceeding ₹2 crore |
Who Can File ITR-4? | Who Cannot File ITR-4? |
---|---|
Small business owners, shopkeepers, and traders | Individuals earning more than ₹50 lakh |
Freelancers, consultants, doctors, and lawyers earning up to ₹50 lakh | Non Resident Indians (NRIs) |
Individuals and firms opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE | Company directors |
Individuals with foreign assets or foreign income |
Who Can File ITR-5? | Who Cannot File ITR-5? |
---|---|
Partnership firms (excluding those required to file ITR-7) | Individuals (they should file ITR-1, ITR-2, ITR-3, or ITR-4) |
Limited Liability Partnerships (LLPs) | HUFs and companies (they should file ITR-6) |
Associations of Persons (AOPs) | |
Body of Individuals (BOIs) | |
Business trusts and investment funds |
Who Can File ITR-6? | Who Cannot File ITR-6? |
---|---|
Private Limited Companies | Companies claiming exemption under Section 11 (charitable or religious organizations should file ITR-7) |
Public Limited Companies | |
One Person Companies (OPCs) |
Who Can File ITR-7? | Who Cannot File ITR-7? |
---|---|
Charitable trusts and religious institutions | Companies (they should file ITR-6) |
Political parties | Individuals, HUFs, and firms |
Educational institutions | |
Scientific research institutions | |
Universities and colleges claiming tax exemptions |
India is one of the nations where taxes categorized as direct and indirect abound. The central government, state authorities, and local government bodies do their collection. Here’s a classification of all types of taxes in India:
Category | Type of Tax | Description |
---|---|---|
Direct Taxes | Income Tax | Tax levied on an individual’s or entity’s income based on the applicable slab rates. |
Corporate Tax | Tax imposed on the profits of companies, including domestic and foreign companies. | |
Capital Gains Tax | Tax on the profit earned from the sale of capital assets like stocks, property, etc. | |
Securities Transaction Tax (STT) | Tax on the sale and purchase of securities traded on stock exchanges. | |
Gift Tax | Tax on gifts received above a specified limit from non-relatives. | |
Wealth Tax (Abolished) | Previously applied to individuals with net wealth above a certain threshold but abolished in 2015. | |
Indirect Taxes | Goods and Services Tax (GST) | A replacement for multiple indirect taxes such as value added tax, service tax, etc. A unified tax on goods and services. |
Customs Duty | Tax imposed on goods imported into or exported out of India. | |
Excise Duty (Abolished) | Previously levied on the manufacture of goods but replaced by GST. | |
Value Added Tax (VAT) (Partially Applicable) | A state level tax applicable only on certain items like fuel, alcohol, etc., post-GST implementation. | |
Service Tax (Abolished) | Previously levied on services but replaced by GST. | |
Other Taxes & Charges | Stamp Duty | Tax on legal documents related to property transactions, shares, etc. |
Professional Tax | A tax imposed by state governments on salaried individuals and professionals. | |
Property Tax | Tax levied by local municipalities on real estate properties. | |
Road Tax | Tax imposed on vehicles during registration, varying by state. | |
Toll Tax | Charge levied on the use of specific roads, bridges, and highways. | |
Entertainment Tax (Merged with GST) | Previously charged on movie tickets, events, etc., but now covered under GST. |
Completing your Income Tax Return (ITR) is easy if done according to your bank’s guidelines. They are also available for download at the Income Tax E-filing Portal. It does not matter if you are an employee, freelancer, executive, or entrepreneur; an ITR form needs to be submitted to ensure you don’t violate deadlines. Here’s a walkthrough to completing your ITR form:
Here’s why you should keep your ITR filing date on your calendar:
Taxes can concern some people with the new introduction of different tax regimes. PNB MetLife has developed an effective income tax calculator that enables you to determine tax liabilities effortlessly.
This enables you to:
Salaried individuals with income up to ₹50 lakh should file ITR-1 (Sahaj). If they have capital gains or foreign income, they should file ITR-2 instead.
No, business owners must file ITR-3 (for regular businesses) or ITR-4 (for small businesses under presumptive taxation).
Filing the incorrect form may lead to rejection or notices from the Income Tax Department, requiring you to file a revised return.
ITR-7 is for trusts, religious institutions, political parties, and NGOs filing returns under Sections 139(4A) to 139(4F).
Before filing your return, you can use the PNB MetLife Income Tax Calculator to estimate your taxable income, deductions, and total tax liability.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
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