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As the types of taxpayers are different, so as the forms of Income Tax Returns. The government collects taxes from eligible taxpayers to amp up the revenue sources and boost the development of the country. Filing the ITR is mandated by the Income Tax Act, 1961, and it is also a compliance parameter that the Income Tax Department uses. Under the income tax, there are about 7 ITR forms that apply to separate types of taxpayers based on the source of income and the taxpayer’s status. The taxpayer’s status can be an Individual, HUF, Company, AOP/BOI, firm, or other. Also, the sources of income can be “salary, house property, capital gains, profits and gains from business and profession, and other sources. Based on these forms are the income tax returns. To know the different types of income tax returns and your eligibility, scroll down to the end.
Different Types of Income Tax Returns
Whatever the source of income is, taxpayers need to file a single ITR based on their eligibility and the extent of income. It means that only ITR is to be filed with a PAN number. Therefore, look at the following and select the ITR you are eligible to file based on the criteria
ITR 1
Individuals meeting the following points need to File your ITR
- Salary and pension earners
- Income of up to Rs 50 lakhs
- Agricultural income up to Rs 5000
- Income from a single house property
- Income earned from other sources, except winning a lottery or horse racing
Under the below-mentioned circumstances, individuals are not eligible to file
- Profits and gains from business and profession
- Capital gains (short term), long term u/s 112 exceeding Rs 1.25 lakhs
- Income from more than one house property
- Income from other sources like winnings from the lottery, activity of owning and maintaining race horses, income taxable at special rates u/s 115 (BBDA & BBE)
ITR 2
ITR 2 applies to individuals who are not eligible for ITR 1 and HUF. The individuals and HUFs not having income under the head of profits and gains of business and profession, and the ones who are ineligible for ITR 1 (SAHAJ) can file this return form.
ITR 3
Both individuals and HUFs should opt for the ITR 3 if they meet the following conditions. These are as such
- Income from business and profession
- Income received from being a partner in a firm
- Income from salary, pension, capital gains, and other sources
- For income from investments in unlisted equity shares
- Individual director of a company
It can be concluded that any person who is eligible to file ITR 1, ITR 2, and ITR 4 is not eligible to file ITR 3.
What is ITR 4 or Sugam?
Resident individuals, HUFs, and firms other than LLPs are eligible to file ITR 4. The following types of income are to be reported in this return form
- Income not exceeding Rs 50 lakhs in the financial year
- From business and profession u/s 44AD, 44ADA, and 44AE (on presumptive basis)
- Salary/pension, one house property, agricultural income up to Rs 5000
- Other sources like savings account, deposits in bank, post office, cooperative societies, tax refund, family pension, interest on enhanced compensation, and any other interest income (excluding winning from lottery and income from race horses)
ITR 5
This form is filed based on the status of a taxpayer as individuals or HUFs are not eligible to file this form, whereas bodies of Individuals, cooperative societies, Limited Liability Partnerships, Associations of Persons, local authorities, artificial judicial persons, business trusts, estates of deceased, and estates of insolvent.
ITR 6
The income tax return form 6 is to be filed by companies except those under section 11 of the Income Tax Act 1961. The companies claiming exemptions u/s 11 are those that receive income from property used for religious or charitable purposes.
What is ITR 7?
Companies who are filing returns under section 139(4A), 139(4B), 139(4C), and, 139(4D) file their returns in ITR 7. These companies are those entities claiming exemption as colleges, universities, scientific research institutions, religious or charitable trusts, political parties, etc.
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These are the different types of income tax returns in India. If you are wondering how to file income tax returns, reach out to expert CAs so that it becomes easy for you. Navigating the world of taxation and finance is not an easy task; therefore, opting for professional services solves your problems. While TaxDunia seasoned experts are doing your taxes, you focus on your business with our expert guidance.
