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Different Types of ITR Forms In India

Nuts and Bolts of Income Tax return forms

Income tax return forms can be necessarily defined as document formats that are officially approved by the tax authority during a specific financial year to file an income tax return concerned with all income that has been earned in that year. ITR serves a quite vital role if you are self-employed if you want to claim a refund over the bank policies, if you are filing a government tender, to carry forward losses. To be very precise there are a lot of instances in which an income tax return can save your back! The ITR forms can be classified into two elaborate categories based on whether it applies to individuals or companies. Here’s everything you need to know about income tax return forms. Have a look!

Getting into the Intricacies

The income tax return forms are divided into seven different types that are more or less different than each other. They are named ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7. The first four are applicable for individuals, while the later ones are applicable for firms or companies. Knowing about the income tax return forms isn’t rocket science. All you need to know is described below:

  • ITR-1

Popularly known as SAHAJ, ITR-1is applicable to any individual whose income is not taxable. This form can be used by someone who earns revenue through pension or salary, by any person who deserves through a single house property or by anyone earn their income through another source like interest, dividend, etc. As long as the pay isn’t made through any business or firm ITR-1 is valid for any individual who fits into these criterias.

  • ITR-2
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This form is valid for individuals or HUFs that aren’t earning their income from profits of business or profession. The way can be used when the individual is earning his income from salary or pension, when an individual/ HUF is earning lump sum through house properties and when the total income of individuals/ HUFs is income derived from capital gains. The other criteria in which ITR-2 can be applicable is when the total income of an individual/ HUF includes income from other sources like that of windfall income, for example, horse racing or the winning of lotteries.  The only possibility when ITR-2 can’t be utilized is when the firm has income from business or profession.

  • ITR-3

Like that of ITR-2, ITR-3 is valid for the income earned from salary/pension and when an individual/HUF is making enough from house property. But there are individual differences as well. Unlike ITR-2, it is also applicable for those who are making an income from the profession or business of any partnership firm in which an individual/HUF is a partner. (The firm can be an LLP). Such rent may include any income like that of remuneration from the firm, bonus, salary, commission, interest, etc.

Any individual/HUF whose income exceeds Rs. Fifty lakhs for the financial year is also eligible for this ITR. Windfall income is also a part of the validity criteria as well, and the form is also applicable for businesses with a presumptive turnover exceeding or equal to Rs 2 crores. ITR-3 is only not applicable when the total income of individuals/HUFs includes income from his/her proprietorship firm.

  • ITR-4
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On the other hand, ITR-4, also known as Sugam, is valid for all those individuals whose annual income exceeds a sum of Rs. Fifty lakhs to be very specific. Apart from this, the income tax assessed must be a company director or may run an organization or business. Besides, if any individual has invested in unlisted equity shares, then he or she may also opt for ITR-4. This form can be used by someone who earns income through pension or salary, by any person who makes through a single house property or by someone who receives revenue through pension or salary. Individuals having income from any profession or business that is computed under sections 44AE, 44AD and 44DA are also eligible to file ITR-4.

  • ITR-5

Tax assesses applicable to non-individual income can go for ITR-5. Thus any Firm,

Limited Liability Partnership (LLP), Body of Individuals (Bois), Association of Persons (AOPs), Co-operative Society, Artificial Judicial People, and Local Authority may benefit from ITR-5. For persons other than HUF, company, individual or any person filing ITR-7, anyone can apply for ITR-5.

  • ITR-6

Form ITR 6 applies to all the companies other than the ones claiming for exemption under section 11. These may include those firms that earn income from property held unethically for religious or charitable purposes. Apart from that, any company or firm that is interested in filing ITR-6 needs to file its returns electronically while signing through the digital signature that is necessary for the security concern.

  • ITR-7

ITR-7 applies to any company assessed under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) that fall under the income tax act of 1961. Any company working under these sections can furnish a return for ITR-7 without any hassle.

What are the Critical changes in forms?

There have been a lot of changes to fix the loopholes in the system and make the system more constructive. Massive changes are going to happen, and some of these have been implemented as well in the income tax return forms. In ITR 1 and four the nature of residuary income is asked to prevent the flaws and corruption existing in the system. The online filing of ITR, property-wise details of rent arrears, investment details in unlisted companies and specifying the type of house property are mandatory Apart from that in ITR 2, 3, 5, 6 the buyer’s information is required in case of transfer of immovable property, in ITR 1, 2, 3, 4 reporting of salary income on gross basis is included, in ITR 2, 3, 5 investment in unlisted companies is checked efficiently and in 1, 2, 3, 4 identification of ghost directors and shell companies are taken into consideration. These changes take place most probably every single year. So, it is a must to go through the newer guidelines before filling up the returns. If you are not sure about any of the clause’s, then it is at all times advisable to get in touch with the qualified tax consultants. They can be of great help in helping you file tax returns.



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