Even if you are not required to file Income Tax Return (ITR) mandatorily as per your tax slab, submitting the return can be useful. You may need to claim refunds for excess taxes paid. ITR records are also essential for loan or visa applications. Earnings from multiple sources or foreign assets also call for ITR filing.

What are ITR Forms?

The tax return form is a document you need to furnish to the Income Tax Department. In this form, you must report details of your earnings, expenses, and other tax-related information. It helps in tax liability assessment.

The tax department prescribes separate ITR Forms for different taxpayers according to:

• Total income and income source
• Overseas assets
• Earnings from foreign countries

Here’s a guideline on the different ITR Forms to help you determine which one you need.

Types of ITR Forms required for filling ITR and taxpayer categories concerned

ITR-1 (Sahaj)

Applicable to resident Indians with total annual income up to Rs. 50 lakhs from:

• Salary, pension, single house property (e.g. rent)
• Other sources such as interests, excluding lottery, horse race etc.
• Agriculture (less than Rs 5,000)
• Not from foreign assets/ foreign countries
• Not for an Individual who is either Director in a company or has invested in Unlisted Equity Shares)

ITR-2

Valid for incomes higher than Rs. 50 lakh, including:

• Salary/pension
• More than one house property
• Capital gains
• Lottery/ horse race
• Foreign assets
• Foreign income
• Share trading gains
• Other sources such as fixed deposit interests
• Agriculture (over Rs. 5,000)

Individuals who can use this ITR include:

• Residents, non-resident Indians (NRIs) and HUFs satisfying the criteria
• Company director
• Not earning from business or profession

ITR-3

It is relevant for:

• Proprietary business owners
• Professionals
• Company Director
• Partner in a firm
• Salaried taxpayers earning from intraday share trading
• Investors in unlisted equities
• Businesses with turnovers higher than Rs. 2 crores

ITR-4 (Sugam)

Taxpayers who do not maintain and audit books of accounts should use this form. Eligibility includes Individuals, HUFs, and partnership firms with:

• Income from business with gross turnover up to Rs. 2 crores taxed on presumptive basis under Section 44AD/ 44AE
• Annual returns up to Rs. 50 lakhs from profession taxed as presumptive income under Section 44AD, 44ADA and 44AE, including a freelancer working on a notified profession
• Earnings from:
• Salary/ Pension
• One House Property
• Other Sources

This ITR does not apply to:

• Director of a company
• Investors of unlisted equity shares
• Owners of foreign assets
• Persons claiming losses
• Agency
• Income from
  • foreign country
  • commission/ brokerage
  • Profession – medical, legal, consultancy, engineering, architectural, interior decoration, accountancy, company secretary, films, and information technology
  • Speculative business
  • Capital gains
  • Lottery/ horse racing
  • Agriculture, exceeding Rs. 5,000

ITR-5

It is meant for:

• Partnership firms
• Limited Liability Partnerships
• Body of Individuals
• Co-operative Societies
• Association of Persons
• Artificial Juridical Persons
• Business Trust
• Estate of Deceased/ Insolvent person

ITR-6

Companies that do not claim Section 11 exemptions, including income from charitable or religious properties, can file this ITR electronically.

ITR-7

Suitable for companies filing returns under:

• Section 139(4A): (charitable or religious property)
• Section 139(4B):(Political parties)
• Section 139(4C): (medical organizations, news agencies, educational bodies, scientific research agencies)
• Section 139(4D): (Colleges and universities not needed to report profits and losses)

Conclusion

Using the correct ITR Forms simplifies tax liability calculations. Hence, go through the instructions on the Income Tax Department’s website carefully before filing your returns.

^*Above enumerated ITRs are subject to change from time to time. Please consult your tax advisor for further details.

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The income tax is levied on all earning individuals who fall under a taxable income bracket. The income tax is paid to the Government of India and is charged annually. However, there are several tax deductions and exemptions that you can claim to lower your tax liability. The Income Tax Calculator helps you ascertain your tax output for a financial year based on your taxable income. This can help you plan well and save tax using the tax-saving deductions and exemptions, if possible.