Which ITR Should I File? - Types of Income Tax Return Forms

What are ITR forms?

ITR is a prescribed form through which you report the details of your income earned, deductions claimed, and taxes paid in a financial year to the Income Tax Department. It also allows you to carry forward the losses and claim a refund from the Income Tax Department.

The department has notified seven various form types prescribed for different categories of taxpayers (individual, HUF, company, LLP, Partnership firms, etc). The department has notified 7 different forms, i.e., ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 & ITR-7, till date. The selection will depend upon the Taxpayer’s status, Nature of income, Residential Status in India, etc.

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Types of ITR Forms and Which Form ITR to File?

The Income Tax Department’s official website lists different ITR form types that taxpayers may be required to fill out based on their income. Some of these are easy to file, while others need some additional disclosures like P/L (profit and loss) statements, etc.

ITR 1 or SAHAJ for FY 2024-25

Sahaj is one of the most simplified one-page ITR forms.

Who Can File ITR 1?

This form is for a resident individual whose total income includes-

• Income earned from salary or Pension.
• Income from other sources, excluding income from winning a lottery or income from owning and maintaining race horses, is taxable under section 115BBDA or section 115E.
• However, income from One House Property, in this form, the loss brought forward from previous years are not eligible.
• Income from agriculture activities up to Rs 5000.
• The total income of the individual should not exceed 50 Lakhs.

Who Cannot File ITR 1(Sahaj)?

• Non-Resident
• Not Ordinarily Resident
• A person having a business or profession
• Anyone having a total income exceeding Rs 50 lakhs
• If you own more than one house property
• Income arising from Winnings from Lottery or Horse Races, Gambling, or speculation income
• An assessee having Capital Gains income
• Individuals having a financial interest in assets located outside India, which includes any signing authority for accounts held outside India.
• Person having foreign income or claiming relief u/s 90/90A/91 for taxes paid in foreign country
• Loss under income from other sources
• One who desires to carry forward or bring forward loss under income from house property.
• An individual who is holding the position of a Director in a company
• An Individual who has held any unlisted equity shares at any time during the previous year
• Agricultural income exceeding Rs. 5,000/-
• Any claim of credit of TDS in the hands of any other person
• Any tax has been deducted under Section 194N
• In cases where payment or deduction of tax has been deferred on ESOP

ITR 2 FY 2024-25

Who Can File ITR 2?

This form is for individuals or a HUF (Hindu Undivided Family) whose income includes:

• Income from salary or Pension
• Income from House Property(one or more)
• Income from other sources, including income from winning a lottery, income from owning and maintaining horse races, or income taxable at special rates.
• Persons who had investments in unlisted equity shares at any time during the entire financial year.
• An individual who is a director in a company.
• An individual who is a Resident(ROR/RNOR)or non-resident.
• Income earned from capital gains
• Income from foreign assets/ other foreign income.
• Agricultural income of more than Rs 5,000/-
• Incomes where clubbing provisions are applicable
• Individuals having a financial interest in assets located outside India, which includes any signing authority for accounts held outside India.
• One who desires to carry forward or bring forward loss under income from house property.
• Any tax has been deducted under Section 194N
• In cases where payment or deduction of tax has been deferred on ESOP
  (Total income can exceed 50 lakhs in this ITR Form)

Who Cannot File ITR 2?

• Individuals or HUFs whose accruing income is from business or profession
• Partner of a partnership firm having income from a partnership.

ITR 3 for FY 2024-25

Who Can File ITR 3?

This form is to be used by either an individual or a Hindu Undivided Family who are carrying on a profession or a business. The following persons are eligible to fill this form:

• The residential status can be either Non-resident or Resident(ROR/RNOR)
• If a person is the director of the company.
• Persons who had investments in unlisted equity shares at any time during the entire financial year.
• Income from other sources
• Income of a person who is a partner in a firm.
• Income from salary or Pension
• Income from House Property(one or more)
• Total income can exceed 50 lakhs in this case.
• Income earned from capital gains or foreign assets/foreign income.
• Who has income under the head profits or gains of business or profession and who is not eligible to file Form ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam).
• In short, individuals or HUFs who are not eligible to file ITR-1, ITR-2, and ITR-4 should file ITR-3

Who Cannot File ITR 3?

• Companies
• Trusts
• Co-operative Society
• Local Authority
• Artificial Juridical Person
• Firm including LLP
• AOP, BOI

ITR 4 or Sugam for FY 2024-25

Who Can File ITR 4?

• This form is applicable to both the resident individuals and HUFs.
• Other than LLPs, all partnership firms which are residents and have an income that is either professional or from the business.
• Those persons who have opted for a presumptive income scheme according to Section 44AD, Section 44AE, and Section 44ADA of the Income Tax Act.
• If the person’s business turnover exceeds Rs. 2 crores, then he is required to file ITR-3 with the Audit report and not ITR 4.
• The total income for ITR 4 should not exceed Rs. 50 lakhs.
• Income from One House Property(loss brought forward from previous years or carry forward of losses are not eligible in this ITR Form ).
• Income from Salary or Pension.
• Income from other sources. (excluding income from winning a lottery or income from owning and maintaining race horses, income taxable under section 115BBDA or 115BE).

Who Cannot File ITR 4(SUGAM)?

• Anyone who maintains books of accounts and is willing to set off expenses with income earned and does not want to file as per the 44AD / 44ADA and 44AE provisions, i.e., presumptive taxation basis.
• Income earned through capital gains.
• If you own more than one house property, whether let out or self-occupied
• A person having Agricultural income in excess of Rs 5,000.
• A person who is a Director in a company
• A person has held any unlisted equity shares at any time during the previous year.
• Persons having financial interest in assets located outside India, which includes any signing authority for accounts held outside India
• Income arising from Winnings from Lottery or owning and maintaining Horse Races, Gambling, or speculation income.
• Person claiming relief u/s 90/90A/91 for taxes paid in a foreign country.
• Loss under income from other sources
• One who desires to carry forward or bring forward loss under income from house property
• Any claim of credit of TDS in the hands of any other person
• In cases where payment or deduction of tax has been deferred on ESOP

ITR-5

Who Can File ITR 5?

The following should choose the ITR-5 form :

• Investment funds
• Business trusts
• Estate of insolvent, Estate of deceased
• Artificial Juridical Person (AJP)
• Body of Individuals (BOIs)
• LLPs
• Associations of Persons (AOPs) and Firms.

Who Cannot File ITR 5?

• Individuals
• HUF
• Company
• A person is required to file Form ITR-7, i.e., Trusts, etc, claiming the exemption of Section 11.

ITR-6

Who Can File ITR 6?

This form can be used by companies that are not claiming any exemptions under Section 11(Income from property held for charitable or religious purposes) and by a person who is required to file the return in Form ITR-7.

Who Cannot File ITR 6?

• Section 11 companies are companies formed with a charitable or religious purpose.
• A person on which Form ITR-7 is applicable

ITR-7

Who Can File ITR 7?

Persons, including companies that are required to file returns under Section 139(4A), Section 139(4B), Section 139(4C), Section 139(4D), Section 139(4E), or Section 139(4F) should choose ITR-7 form. The details against each section are briefed for you below:

• Section 139(4A): The return to be filed in respect of Income from a property, of which the true owner is a trust or such property is held under any other legal obligation. In this case, the income generated should be used only for charitable or religious purposes.
• Section 139(4B): The return to be filed in respect of total Income derived by a Political party
• Section 139(4C): The below-mentioned entities should file returns under this section:
  • i.) Scientific Research Association.
  • ii.) Educational institutions, hospitals, and other medical institutions.
  • iii.)Associations and institutions covered under section 10(23A) and Section 10(23B).
  • iv.) News agencies.
  • v.) Others as may be prescribed.
• Section 139(4D): The returns by colleges, universities, or any other institutions that are not required to furnish a return of income or loss under any other provision under this section.

Who Cannot File ITR 7?

Any other person from those specified above cannot report using the ITR 7 Form. From A.Y.2022-23 onwards, ITR 7 will not be applicable to income is unconditionally exempt.

What happens when you file wrong ITR form?

Filing the wrong Income Tax Return (ITR) form can lead to a few complications, but there are also solutions to rectify the situation. Here's what you need to know:

• Rejection of ITR: The Income Tax Department might reject your return if it's filed in an incorrect form. This can cause delays in processing and potential penalties for late filing (if the deadline has passed).
• Scrutiny or Assessment: Even if your return isn't rejected, using the wrong form could trigger additional scrutiny from the tax authorities. They might ask you to re-file using the correct form.

There are ways to address filing the wrong ITR form:

• Revised Return: If you catch the mistake before the ITR filing deadline you can file a revised return using the correct form. There's no limit on the number of revised returns you can submit within the year.
• Defective Return Notice: If the department identifies the incorrect form after the deadline, they might issue a "defective return notice" under Section 139(9) of the Income Tax Act. This notice gives you 15 days to rectify the mistake by filing a revised return. You can also request an extension for filing the revised return.

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Who Should File the ITR?

Individuals who earn income above a certain threshold limit are generally required to file an Income Tax Return (ITR) form. Individuals with Total Income exceeding the Basic Exemption Limit: The slab rates for FY 2024-25 are as follows -

Note: If your total income (before deductions) exceeds these thresholds, you are required to file an Income Tax Return (ITR).

If you opt for the new tax regime in FY 2024-25, then, the threshold for filing ITR is Rs.4 lakhs. This means that if your annual income is less than Rs. 4 lakhs, you are not required to file an ITR. However, there are some exceptions to this rule.

Certain Individuals Required to File ITR:

These individuals are required to file an ITR regardless of the income threshold.

In addition to the above, there are certain conditions in which individuals are required to file an ITR, even if your income is below the basic exemption limit -

• Deposits in a Current Account: If you have deposited ₹1 crore or more in one or more current bank accounts. However, this rule does not apply to deposits in a post office current account.
• Deposits in a Savings Account: If you have deposited ₹50 lakh or more in one or more savings bank accounts.
• Foreign Travel Expenses: If you have spent more than ₹2 lakh on foreign travel for yourself or someone else.
• Electricity Bills: If your total electricity consumption expenses exceed ₹1 lakh in the previous year.
• TDS or TCS Exceeds ₹25,000: If the tax deducted at source (TDS) or tax collected at source (TCS) exceeds ₹25,000 in the previous year. For senior citizens (above 60 years), the limit is ₹50,000.
• Business Turnover: If your total sales, turnover, or gross receipts from business exceed ₹60 lakh in the previous year.
• Professional Income: If your total gross receipts from a profession exceed ₹10 lakh in the previous year.

Why Should You File ITR?

1. Legal Proof:
   Income Tax Return serves as a legally significant document registered with the government.
   Accepted as a valid identity proof as well as Income proof.
2. Deduction Claims:
   Filing Income Tax Returns enables taxpayers to claim deductions and exemptions provided by the government to reduce tax liabilities.
   These deductions are applicable to investments and can help in minimizing tax obligations. Additionally, refunds for Tax Deducted at Source (TDS) can be claimed.
3. Loan Application:
   It is essential for loan applications, as banks require various documents including Aadhar card, PAN card, and income proof like Income Tax Returns for the past three years.
4. International Travel Facilitation:
   It is vital for international travel plans as many countries require Income Tax Returns as part of visa application documentation.
   Filing returns showcases a responsible financial history, enhancing visa approval chances.
5. Avoidance of Penalties:
   Failure to file Income Tax Returns when liable to pay taxes can result in penalties as per the Income Tax Act 1961.
6. Loss Carryforward Provision:
   Enables individuals to offset losses against future income, providing tax relief in subsequent years.

How Can I Download the ITR Form Utility Online?

ITR forms can be downloaded from the Income Tax India website for any year.

Steps to download the ITR forms utility online -

1. Visit the official website of the Income Tax department of India.
2. Go to the “Downloads” head on the right side of the screen
3. Choose the specific assessment year.
4. Click on the option ‘Common Offline Utility (ITR 1 to ITR 4)
5. Click on ‘Utility Excel Based’ to download the Excel file for the desired ITR.

Types of Forms to File Income Tax Returns

Form 16

• Form 16 is issued annually by employers to their employees. It serves as proof that the employer has deducted TDS (Tax Deducted at Source) from the salary of the employee and deposited it with the Income Tax Department.
• Form 16 consists of two parts:
  • Part A: This part includes details of the employer and employee, such as their PAN (Permanent Account Number), TAN (Tax Deduction and Collection Account Number) of the employer, period of employment, a summary of tax deducted and deposited quarterly, and assessment year.
  • Part B: This part provides a detailed breakup of salary paid to the employee, allowances exempt under Section 10, deductions allowed under Chapter VI-A (like Section 80C, 80D, etc.), and the resultant taxable income after these deductions.
• Employees use Form 16 to file their income tax returns (ITR). It helps calculate the total income earned during the year and the tax deducted at source. The information provided in Form 16 is crucial for accurate tax return filing. File your tax return.

Form 26AS

Form 26AS is a consolidated tax statement that includes details of tax deducted at source (TDS), tax collected at source (TCS), advance tax paid, and self-assessment tax payments made by the taxpayer. Here are key points about Form 26AS:

• Contents: It shows details of tax credits associated with a PAN (Permanent Account Number), including TDS on salary, interest income, rental income, etc., TCS on purchases, and advance tax and self-assessment tax payments made by the taxpayer.
• Importance: Form 26AS is crucial for taxpayers to verify the tax credits claimed by them in their income tax returns. It helps in ensuring that the taxes deducted or paid on their behalf are correctly reflected and accounted for in their tax liability.
• Access: Taxpayers can view and download their Form 26AS from the income tax department's e-filing portal or through their net banking facility if it's enabled for viewing Form 26AS.
• Verification: Before filing income tax returns, it's advisable for taxpayers to verify the details in Form 26AS to ensure accuracy and avoid discrepancies in claiming tax credits.
• Updates: Form 26AS is periodically updated as and when deductors and banks file their TDS/TCS returns and when taxpayers pay advance tax or self-assessment tax.

It serves as a comprehensive record of all tax-related transactions associated with a PAN, helping taxpayers in their income tax compliance and filings.

Form 15G and Form 15H

Form 15G and Form 15H are forms provided under the Income Tax Act of India to help individuals prevent the deduction of tax at source (TDS) on their income, especially when their total income is below the taxable limit. Here's a brief overview:

• Form 15G: This form is for individuals below 60 years of age (individuals and HUFs) who have a total income that is below the taxable limit. By submitting Form 15G to the deductor (such as banks or financial institutions), they declare that their income is below the taxable limit, and hence, no TDS should be deducted from it.
• Form 15H: This form is for senior citizens (individuals aged 60 years or above) who have a total income below the taxable limit. Similar to Form 15G, by submitting Form 15H, they declare that no TDS should be deducted from their income.

Which ITR to File for the AY 2025-26 (FY 2024-25)?

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