How to Choose Correct Income Tax Form (ITR) to e-file tax return?

Choosing Income Tax Return form

Having Income from more than one source? Got Confused which ITR to fill? With an intention to simplify and make e-filing procedure easy CBDT has issued 8 ITR forms covering all the assessees having various sources of income.

Generally salaried individual is required to file return in ITR-1 or ITR-2, which are easiest form to fill. ITR-3 to ITR-7 are bit complicated. Now let’s take each ITR form and understand which ITR would be applicable to you.

ITR-1 Form (Sahaj)

Every Individual whose total income for the assessment year includes:-

  • 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).

is required to file his return under ITR-1 Form.

Note: ITR1 can be filed only if Exempt Income (Section 10) is less than Rs. 5,000. Else, ITR2 needs to be filed.

In case where clubbing provisions are applicable i.e. where income of another person such as spouse, minor child etc is to be clubbed with the income of the assessee then, ITR-1 can be used only if the income being clubbed comes under the same heads as of assessee.

ITR-2 Form

Every individual or a Hindu Undivided Family whose total income for the assessment year includes:-

  • Income from Salary / Pension; or
  • Income from House Property; or
  • Income from Capital Gains; or
  • Income from Other Sources (including Winning from Lottery and Income from Race Horses)

In case where clubbing provisions are applicable i.e. where income of another person such as spouse, minor child etc is to be clubbed with the income of the assessee then ITR-2 can be used only if the income being clubbed comes under the same heads as of assessee.

ITR-3 Form

Every individual or an Hindu Undivided Family who entered into partnership in a firm and where source of income falls under the head “Profits or gains of business or profession” and does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm. The Individual also should not be in a profession or have a business under proprietorship.

In case a partner in the firm does not have any income from the firm by way of interest, salary, etc. and has only exempt income by way of share in the profit of the firm shall use this form only and not Form ITR-2.

Sugam ITR (4S)

Sugam is to be used only by small businessmen and professionals covered under presumptive taxation, having gross receipt less than Rs.25 lakhs or turnover below Rs.1 crore.

ITR-4 Form

This for is to be filed by Individuals and HUFs who are engaged in any business or professional activity in addition to having sources of income applicable to ITR-3 such as rent, capital gains etc.

Deciding Applicability of Income Tax Forms ITR

ITR-5 Form

Any person being a firm, AOP, BOI, artificial juridical person referred to in section 2(31) (vii), cooperative society and local authority should file tax return in ITR-5. However, a person who is required to file the return of income under section 139(4) or 139(4) (a) or 139(4) (b) or 139(4) (c) or 139(4) (d) shall use ITR-7 not ITR-5 form.

ITR-6 Form

Company, other than a company claiming exemption under section 11 shall use this form for filing tax return.

ITR-7 Form

All the persons including companies who are required to furnish return under section 139(4A) or under section 139(4B) or under section 139(4C) or under section 139(4D) shall use this form to file tax return.

Deciding Applicability of Income Tax Forms ITR

ITR-V/Acknowledgement Form

Acknowledgement form for all ITR- Forms necessarily has to be submitted along with ITR forms. In case individuals who have e-filed their returns without digital signature needs to send a signed copy of ITR-V to the CPC (Centralized Processing Center) in Bangalore within 120 days from filing of return.

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