Filing your income tax return (ITR) in India is crucial to ensure compliance with the law and avoid any penalties. Here's a simplified guide to help you understand which ITR form suits your needs:
1. ITR-1 or Sahaj
Designed for:
Salary and pension earners
Income from other sources (excluding lottery or horse racing winnings)
Agricultural income below Rs. 5,000
Income from a single house property (with certain exemptions)
2. ITR-2
Suitable for:
Individuals and Hindu United Families (HUFs)
Income exceeding Rs. 50 lakh
Income from salary, pensions, capital gains, and other sources
Income from foreign assets
Agricultural income exceeding Rs. 5,000
3. ITR-3
Intended for:
Individuals and HUFs with income from business or profession
Income from being a partner in a firm
Income from salary, pension, capital gains, and other sources
Investments in unlisted equity shares
Individual directors in a company
4. ITR-4 or Sugam
Suitable for:
Individuals, HUFs, and firms with income up to Rs. 50 lakh from business or profession
Those under the presumptive income scheme (Section 44AD, 44ADA, and 44AE)
5. ITR-5
Meant for:
Firms
Body of Individuals
Co-operative societies
Limited Liability Partnerships (LLPs)
Associations of Persons
Local authorities
Artificial Judicial Persons
Estates of insolvent or deceased individuals
Business trusts (excluding individual citizens)
6. ITR-6
To be filed electronically by:
Companies (except those claiming exemption under Section 11 for income from religious or charitable property)
7. ITR-7
Applicable for companies filing returns under specific sections:
Section 139(4A): Individuals holding property for charitable or religious purposes
Section 139(4B): Political parties and affiliates
Section 139(4C): Institutions or associations like medical institutions, news agencies, educational institutions, etc.
Section 139(4D): Colleges, universities, or institutions not required to report revenue and losses.
Comparison Table
ITR Form | ITR-1Ineligibility | ITR-2 | ITR-3 | ITR-4 | ITR-5 | ITR-6 | ITR-7 |
|---|---|---|---|---|---|---|---|
Eligible Entities/Individuals | Individuals | Individuals and HUFs | Individuals and HUFs | Individuals, HUFs, and firms | Firms, HUFs, Co-operative societies, LLPs, etc. | Companies (except those claiming exemption under Section 11) | Companies filing under specific sections |
Income Criteria | - Income from salary and pension - Income from other sources (excluding lottery or horse racing winnings) - Agricultural income below Rs. 5,000 | - Income exceeding Rs. 50 lakh - Income from salary, pensions, capital gains, and other sources - Income from foreign assets - Agricultural income exceeding Rs. 5,000 | - Income from business or profession - Income from being a partner in a firm - Income from salary, pension, capital gains, and other sources - Investments in unlisted equity shares - Individual directors in a company | - Income up to Rs. 50 lakh from business or profession - Those under presumptive income scheme (Section 44AD, 44ADA, and 44AE) | - No specific income criteria | - No specific income criteria | - No specific income criteria |
Key Features | Designed for small business owners and professionals opting for presumptive taxation | Applicable to a wide range of non-individual entities, including firms, associations, and trusts | Suited for professionals, business owners, and directors with complex income structures | Designed for small business owners and professionals opting for presumptive taxation | Applicable to a wide range of non-individual entities, including firms, associations, and trusts | Electronic filing is required for companies, excluding those eligible for exemption under Section 11 | For companies filing under special provisions like charitable or religious institutions, political parties, educational institutions, etc. |
Ineligibility |
|
| Individuals and HUFs without commercial or professional income |
|
| Businesses not seeking exemption from taxation on revenue generated by charitable or religious trusts | All other types of assessments as no alternative form exists |
Understanding the right ITR form is crucial, especially for aspiring home loan borrowers, as lenders often require the submission of income tax returns as proof of income. By selecting the appropriate ITR form, borrowers can establish their income sources and enhance their creditworthiness
The information provided in this article about Income Tax Return (ITR) forms is for educational purposes only. It is not intended for legal actions. Readers are advised to seek professional advice for their specific tax needs.
Which Income Tax Return (ITR) form best matches your tax-filing vibe?
ITR-1: "Sahaj" - Simple and stress-free!
ITR-2: "Business Boss" - Diving into diverse incomes!
ITR-3: "Hustler's Choice" - Handling business like a pro!
ITR-4: "Sugam Saver" - Keeping it easy for small businesses!
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