Introdution

Welcome to our detailed tutorial to the use of ITR forms! When it comes to completing your income tax return in India, you must select the appropriate form based on your income sources and other important information. Understanding the various ITR forms, including ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7, is critical for proper tax filing. In this article, we will walk you through the applicability of each ITR form, ensuring that you understand which one is best for your purposes.

ITR forms are crucial for India's income tax return filing, with seven types of itr forms ranging from ITR 1 to ITR 7. Understanding eligibility criteria is essential for accurate tax filing.

Understanding the Different ITR Forms

When it comes to filing your income tax return, selecting the correct ITR (Income Tax Return) form is crucial. Each ITR form is designed to accommodate specific income sources and situations, ensuring that taxpayers provide accurate and relevant information to the Income Tax Department. In this section, we will take a detailed look at each ITR form for filing income tax return for financial year 2023-24 respective assessment year 2024-25, explaining their applicability, eligibility criteria, and the types of income they cover.

Applicability of ITR Forms: ITR 1 to ITR 7 for FY 2024-25

As the financial year 2023-24 approaches, it's essential to understand the applicability of the different ITR forms to fulfill your income tax obligations. Let's take a closer look at ITR 1 to ITR 7, their rules, beneficiaries, and exceptions.

ITR 1 is suited for individuals with income from salary, one house property, or other sources like interest. On the other hand, ITR 2 caters to those individuals and Hindu Undivided Families (HUFs) with income from more than one house property, capital gains, or foreign assets.

For individuals and HUFs with income from business or profession, ITR 3 is the suitable form. Meanwhile, ITR 4 is designed for individuals, HUFs, and firms (other than LLP) with a presumptive income scheme under sections 44AD, 44ADA, or 44AE of the Income Tax Act.

If you have income from partnership firms, LLPs, or associations, ITR 5 is the form for you. On the other hand, ITR 6 is applicable to companies that are not claiming exemption under section 11 of the Income Tax Act. Lastly, ITR 7 is suited for persons including companies required to furnish returns under sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act.

FAQ

What are ITR forms?

ITR forms, or Income Tax Return forms, are the documents that individuals and entities use to file their income tax returns with the tax authorities. These forms are designed to capture specific information about the taxpayer's income sources, deductions, and tax liabilities.

How many types of ITR forms are there?

There are seven types of ITR forms: ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7. Each form caters to different categories of taxpayers, depending on the nature of their income sources, business activities, and other factors.

Which ITR form should I use for filing my income tax return?

The appropriate ITR form for you depends on your income sources, residential status, and other relevant factors. For example, if you have only salary income and no other complex tax situations, ITR 1 might be suitable for you. On the other hand, if you have income from business or profession, you may need to use ITR 3 or ITR 4. It is recommended to consult with a tax professional or refer to the guidelines provided by the tax authorities to determine the correct form for your situation.

What is the difference between ITR 1 and ITR 2?

ITR 1, also known as Sahaj, is for individuals with income from salary, one house property, other income sources (excluding lottery and horse races), and total income up to ₹50 lakhs. ITR 2, on the other hand, is for individuals and Hindu Undivided Families (HUFs) who have income from any source except business or profession. It is applicable when the total income exceeds ₹50 lakhs or there are foreign assets/income to be reported.

What is ITR 3 used for?

ITR 3 is used by individuals and HUFs who have income from business or profession. If you are a partner in a partnership firm or a proprietor of a business, and your total income exceeds ₹50 lakhs, you will need to file your tax return using ITR 3.

Who should use ITR 4?

ITR 4, or Sugam, is meant for individuals, HUFs, and firms (other than LLP) who have opted for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act. It is applicable when the total income is up to ₹50 lakhs and the taxpayer has income from business or profession.

What is the purpose of ITR 5?

ITR 5 is used by firms, Association of Persons (AOPs), Body of Individuals (BOIs), Limited Liability Partnerships (LLPs), artificial juridical persons, co-operative societies, and local authorities. It is applicable for entities other than individuals, HUFs, companies, and those filing their return under presumptive taxation.

When should I use ITR 6?

ITR 6 is used by companies, other than those claiming exemption under Section 11 of the Income Tax Act. If you are a company or a corporate entity that falls under this category, you should file your income tax return using ITR 6.

Who should use ITR 7?

ITR 7 is used by individuals and companies who are required to furnish their income tax return under Section 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act. This form is applicable for entities such as trusts, political parties, institutions, colleges, and investment funds.