Income Tax Return (ITR) is a tax filing form that all taxpayers must fill at the end of every financial year. It holds a detailed account of your income and the taxes paid to the government. ITR came into effect under the Indian Income Tax Act of 1961.
Filling your ITR on time can come in handy for multiple purposes. Whether you are looking to apply for a loan or visa, claim a tax rebate, or invest in foreign assets. Having your ITR form can help to smoothen out the process.
Currently, there are seven types of ITR forms. Each form caters to a specific set of taxpayers. The type of return in income tax filling you are eligible for primarily depends on your:
source of income,
total income,
category of taxpayer you are a part of.
The article will give you a gist about the different types of ITR forms that are available. And will help you find out which form you are eligible to file returns under as per the given criteria.
ITR 1 – Sahaj
This income tax return form for individuals whose total income in a financial year includes the following:
Income from – salary/ pension
Income gains from one house property (this excludes cases where loss is brought forward from the previous financial year)
Income gains from other sources of income (gains from winning a lottery and race house is excluded)
Income from agriculture activities does not exceed INR 5,000.
ITR 2
ITR 2 form is for individuals or Hindu Undivided Family (HUF) whose total income in a financial year from the following sources exceeds INR 50 lakhs.
Income from – salary/ pension
Income gains from one house property
Income from other sources of income
An individual is eligible to file income tax returns under ITR 2 if his total income in a year under the following situations:
If the individual is Director in a company
If the individual has invested in unlisted equity shares in a financial year
If the individual is a Resident Not Ordinary Resident (RNOR) or is a Non- Resident of India (NRI)
If the individual receives income from capital gains
If the individual holds a foreign asset or receives foreign income
If the individual has agriculture income exceeding INR 5,000
Note: ITR 2 form does not cater to individuals whose income is generated by a business or profession.
ITR 3
ITR 3 form for filing returns is used by individuals or Hindu Undivided Family (HUF) whose source of income is generated from business or profession.
Individuals having income from the below-mentioned sources can file returns under ITR 3:
Individuals having a business or profession
If the individual is a director in a company
If the individual has invested in unlisted equity shares at any point in time during the financial year
If the individual has income from – salary/ pension/ house property/ other sources of income
If the individual is an acting partner in a firm
ITR 4 – Sugam
Individuals, HUFs and partnerships firms (other than LLPs) and residents of India are eligible to file for returns under ITR 4 if their income includes the following:
Business earnings as per the presumptive income scheme under – Section 44 AD/ 44 AE
Professional earning as per the presumptive income scheme under – Section 44 ADA
Income from salary/ pension not exceeding INR 50 lakhs
Income from one house property not exceeding INR 50 lakhs (this also excludes cases where loss is brought forward from the previous financial year)
Income from other sources of income not exceeding INR 50 lakhs (However, this excludes gains from winning a lottery and race house)
Note: Freelancers are also eligible to file returns under ITR 4, a presumptive scheme only if their total income in a financial year does not exceed INR 50 lakhs from the sources mentioned above.
ITR 5
ITR 5 caters to the following taxpayers:
Firms
Limited Liability Partnership (LLPs)
Association of Persons (AOPs)
Body of Individuals (BOIs)
Artificial Juridical Person (AJP)
Estate of deceased
Estate of insolvent
Business trust
Investment fund
ITR 6
ITR 6 income tax form caters to companies that claim tax exemption under Section 11. This Section is for income earned from property held for charitable trusts and religious institutes.
Note: This ITR can be filled electronically only.
ITR 7
ITR 7 caters to individuals and companies that are required to file tax returns under the following sections:
Section 139 (4A)
Section 139 (4B)
Section 139 (4C)
Section 139 (4D)
Section 139 (4E)
Section 139 (4F)
Keeping your ITR forms and the returns update can also come in handy while applying for various loans such as the Home Loan.
Apply for a Home Loan with HDFC Bank today! Click here to apply now
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*Terms and conditions apply. Home Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.
