ITR Forms: Choosing the Right One for You in India
ITR Forms: Choosing the Right One for You in India
Filing your Income Tax Return (ITR) in India can seem daunting, especially with the various forms available. This guide simplifies the process by explaining the different ITR forms and who should use them.
Understanding ITR Forms:
An ITR form is how you report your income and taxes to the Indian Income Tax Department. Choosing the correct form depends on your residency status, income sources, and total income.
Types of ITR Forms:
Here's a breakdown of the most common ITR forms:
· ITR 1 (Sahaj): Suitable for resident individuals with income up to Rs. 50 lakh from salary, pension, one house property, and other sources (up to Rs. 5,000). This is often used for salaried individuals with basic income sources.
· ITR 2: Applicable to residents/non-residents with income exceeding Rs. 50 lakh, income from capital gains, unlisted shares, multiple house properties, or business/profession (excluding presumptive income). Directors of companies and individuals with foreign income also use this form.
· ITR 3: Used by individuals/Hindu Undivided Families (HUFs) with income from business or profession (including presumptive income) or income from various sources like salary, house property, capital gains, etc.
· ITR 4 (Sugam): Ideal for residents, HUFs, and partnership firms (except LLPs) with business/professional income calculated under presumptive taxation schemes (Sections 44AD and 44ADA).
· ITR 5: For entities other than companies, HUFs, or those filing ITR 7 (like LLPs). This form reports income from business/profession, other sources, etc.
· ITR 6: Used by businesses (except those exempt) to report income from business/profession and other sources.
· ITR 7: Filed by entities exempt from paying income tax, such as charitable trusts, religious institutions, educational institutions, etc.
Choosing the Right ITR Form:
The table below summarizes who can and cannot file each ITR form:
|
ITR Form |
Who Can File |
Who Cannot File |
|
ITR 1 |
Resident individuals with income up to Rs. 50 lakh (salary, pension, one house property, other sources up to Rs. 5,000) |
Non-residents, HUFs, individuals with income exceeding Rs. 50 lakh, company directors, unlisted shares, business/profession (excluding presumptive income), foreign income |
|
ITR 2 |
Residents/non-residents with income exceeding Rs. 50 lakh, capital gains, unlisted shares, multiple house properties, business/profession (excluding presumptive income), company directors, foreign income |
Individuals with income up to Rs. 50 lakh (filing ITR 1) |
|
ITR 3 |
Individuals/HUFs with business/profession income (including presumptive income) or income from various sources |
Individuals/HUFs without business/profession income |
|
ITR 4 |
Residents, HUFs, partnership firms (except LLPs) with business/profession income under presumptive taxation (Sections 44AD & 44ADA) |
Individuals serving as company directors, owning unlisted shares |
|
ITR 5 |
Entities other than companies, HUFs, or those filing ITR 7 (like LLPs) |
Individuals, HUFs, companies, trusts filing ITR 6 or 7 |
|
ITR 6 |
Businesses (except those exempt) |
Companies seeking exemption for charitable/religious trust income |
|
ITR 7 |
Charitable trusts, religious institutions, educational institutions, etc. (exempt from income tax) |
All other taxpayers |
Remember: This is a general overview. For specific situations, consult a tax professional for guidance.