Income Tax Return

What is ITR

ITR is a form in which taxpayers file information about their earned income during assessment year and income tax payable to income tax department.

There are 7 kinds of ITR forms which are notified by Income Tax Department i.e., ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, ITR 7. Tax payer has to file the ITR before the specifies due date. Various ITR Forms depend on the sources of income of taxpayer and amount of income earned and category of taxpayer.

Reasons for filing of ITR

If your gross annual income is more than the basic exemption limit mentioned below:         

 If you want to claim the refund of your additional income tax from department.

If you have earned income or invested in foreign assets during the FY.

If you want to apply for visa or loan than ITR should be filed for verification purpose.

If a taxpayer is company or a firm whether it has profit or loss during FY.

If your income is below exemption limit, but you fulfil the one of the below conditions then you have to file ITR which is mandatory:

• If you have deposited aggregate amount of more than Rs 1 crore in one or more current accounts.
• Have incurred an expense of Rs 2 Lac on foreign travel for self or another person.
•  Have incurred an expense of Rs 1Lac on electricity consumption bill.

Different Types of ITR Forms:

There are seven kinds ITR forms based on source of income and category of taxpayer

1.     ITR -1 Sahaj:

ITR -1 form is used by the taxpayer who is an Indian resident whose income does not exceed Rs.50 Lacs and income is coming from:

• Income from Salary/ Pension; or
• Income from One House Property (excluding cases where loss is brought forward from previous years); or
• Income from Other Sources (excluding Winning from Lottery and Income from Race Horses)
• Agricultural income up to Rs.5000.

2.     ITR – 2

ITR – 2 form is used by an individual or Hindu Undivided family (HUF) whether resident or not, who is not eligible for ITR -1 and whose income is not under the head of income from business or profession and includes following types of income:

• Salary /Pension (more than 50 lakh).
• Capital gains.
•  Income from more than 1 house property.
• Having foreign income or investment.

If assessee is not falling under above criteria, but if he is holding position of a director in a company or holding any unlisted equity shares in the company then he shall required to file ITR 2.

3.     ITR – 3

ITR – 3 form is used by an individual or HUF whose income is coming under the head of business or profession and who is not eligible for ITR – 1, ITR – 2 and ITR – 4. Following persons are required to file ITR-3:

• Each type of Income in ITR – 2/ITR-1
• Income from Business/profession
• Assessee is being a partner of firm.
• Presumptive income >50 lacs/2 crores.

4.     ITR – 4 (Sugam)

ITR 4 applies to individuals and HUFs, Partnership firms (other than LLPs), who are residents and whose total income includes:

• Business income according to the presumptive income scheme under section 44AD or 44AE.
• Professional income according to presumptive income scheme under section 44ADA.
• Income from salary or pension up to Rs.50 lakh.
• Income from one house property, not more than Rs.50 lakh (excluding the amount of brought forward loss or loss to be carried forward).
• Income from other sources having income not more than Rs.50 Lakh (excluding income from lottery and race-horses ).

5.     ITR – 5

ITR – 5 form is applicable to below assessees

• Firms
• LLPs (Limited Liability Partnerships)
• AOPs (Association of Persons)
• BOIs (Body of Individuals)
• AJP (Artificial Juridical Person)

6.     ITR – 6

ITR – 6 form is used by firms not claiming exemption under Section 11(Income from property held for charitable and religious purposes).

7.     ITR – 7

ITR – 7 form is used by companies under section 139(4A) 139(4B) 139(4C) 139(4D).

• Return under section 139(4A) is required to filled by person who receive income from property held under trust or other   charitable and religious purposes.
• Return under section 139(4B) is required to filled by political party if total income without giving effect to provisions under              section  139 A exceeds maximum amount which is not charged under income tax.
• Return under section 139(4C) is to be filled by scientific research association, news agency, association or institution under        section 10 (23A), fund or institution or university or other educational institution, hospital or other medical institution.
• Return under section 139(4D) is to be filled by every college, Institution or university which is not required to furnish the return of income or loss under this provision.

How to file ITR

Before filing the ITR you will be requiring the following documents

• Aadhar card
• PAN card
• Bank Account details
• Investment details
• Form 16