Types of ITR: Which ITR form should you use?

[ecis2016.org] Different ITR forms must be used by various categories of taxpayers in India. Find out which one is applicable to you.

ITR full form

ITR is the acronym for Income Tax Return.

You are reading: Types of ITR: Which ITR form should you use?

Who should file an ITR?

Filing an ITR is necessary in case of any of the following conditions:

1. If gross income is above the basic exemption limit

Taxpayer basic exemption limit

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Even if your income is within the basic exemption limit, you should file an ITR if:

• Your electricity bill is over Rs 1 lakh.
• Rs 2 lakhs or more is spent on a trip abroad.
• Over Rs 1 crore is deposited in one or more current bank accounts.

2. If you want to claim a refund.

3. If you want to apply for loans or visa.

4. To report and carry forward loss under a head of income.

5. If you have invested in foreign assets.

6. Businesses.

ITR form

Taxpayers in India are responsible to file their ITRs, giving full disclosures about their income, tax payments and deductions claimed. As there are many categories of taxpayers in the country, various ITR forms have been designated for each one, to file an ITR.

ITR 1

Meant for Indian residents, ITR 1 or SAHAJ form is applicable to those meeting the following parameters:

1. Total income does not exceed Rs 50 lakhs during a financial year.

2. Income is earned from salary, one house property, family pension income, agricultural income (up to Rs 5,000), and other sources, which include:

• Interest from savings accounts
• Interest from deposits
• Interest from income tax refund
• Interest received on enhanced compensation
• Any other interest income
• Family pension
• Income of spouse

Who cannot use ITR 1

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ITR 1 is not for taxpayers:

• Who are NRIs.
• Who have a foreign income.
• Whose agricultural income is more than Rs 5,000.
• Whose total income is over Rs 50 lakh.
• Whose capital gains are taxable.
• Who have income from business or profession.
• Who have income from more than one house property.
• Who are director in a company.
• With investments in unlisted equity shares.

Changes in ITR 1

In ITR 1 for AY2021-22, Section 115BAC has been added. Those opting for the new tax regime under Section 115BAC, should select ‘Yes’ in the new ITR form. 

ITR 2

ITR 2 can be filed by individuals or HUFs with:

• Income generated from salary or pension.
• Income from a house property.
• Income from other sources.
• With income of over Rs 50 lakhs.
• Agricultural income of over Rs 5,000.
• Income generated abroad.
• For those not eligible to file ITR 1.
• Taxpayers who do not have income from profits and gains of business or profession.
• Taxpayers who do not have income from profits and gains of business or profession in terms of interest, salary, bonus, commission, or remuneration from a partnership firm.
• Have income of another person clubbed with their income, if it falls in any of the above categories.

ITR 3

ITR 3 can be used by an individual or a HUF:

• Directors of companies.
• Having income from profits and gains of business or profession.
• Taxpayer whose income is chargeable for tax under the head ‘profits and gains of business or profession’.
• Those with investments in unlisted equity shares.

Who cannot use ITR 3

ITR 3 cannot be used by:

• Anyone other than an individual or an HUF.
• Those who don’t earn business or profession income.

ITR 4

ITR 4 or SUGAM is used by an individual or HUF or firm (other than LLP), whose total income for the year includes: 

(a) Business income or

(b) Income from profession or

(c) Income from salary/pension or

(d) Income from one house property (excluding cases where loss is brought forward from previous years) or

(e) Income from other sources (excluding winnings from lottery and income from horse racing, dividend income over Rs 10 lakhs, or unexplained income)

(f) When income of another person like spouse, minor child, etc., is clubbed with income of the taxpayer

Who cannot use ITR 4

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ITR 4 cannot be used by:

• NRIs or those who are not ordinarily residents.
• Director of a company.
• Taxpayers whose total income exceeds Rs 50 lakhs.
• Those with income from more than one house property.
• Those having unlisted equity shares at any time during the previous year.
• Those who claim deduction under Section 80QQB or Section 80RRB.
• Those who claims deduction under Section 10AA or Part-C of Chapter VI-A.
• Those with brought-forward loss or losses to be carried forward under any head.
• Those with income of the nature specified in Section 17(2)(vi).
• Those claiming deduction under Section 57.
• Those who want to claim relief under Section 90 and Section 91.
• Those who wants to claim credit of tax deducted at source in hands of any other person.
• Those with assets located outside India.
• Those having signing authority in any account outside India.

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ITR 5

ITR 5 can be used by:

• Firms
• LLPs
• AOPs
• BOIs
• Artificial Juridical Persons
• Local authorities
• Representative assessee referred to in Section 160(1)(iii) or (iv),
• Cooperative society
• Society registered under Societies Registration Act
• Trust other than those eligible to file Form ITR 7
• Estate of deceased person
• Estate of an insolvent
• Business trust referred to in Section 139(4E)
• Investments fund referred to in Section 139(4F)

Who cannot use ITR 5

ITR 5 cannot be used by a person who is required to file the return of income under Section 139(4A) or 139(4B) or 139(4C) or 139(4D) (i.e., trusts, political party, institutions, colleges, etc.).

ITR 6

ITR 6 can be used by a company other than one claiming exemption under Section 11. Note that charitable/religious trusts can claim exemption under Section 11.

Who cannot use ITR 6

ITR 6 cannot be used by a company claiming exemption under Section 11.

ITR 7 

ITR 7 can be filed by people, including companies, required to furnish return under Section 139(4A) or Section 139(4B) or Section 139(4C) or Section 139(4D). These include trusts, political parties, institutions, colleges, etc.

Who cannot use ITR 7

ITR 7 cannot be used by a person who is not required to furnish return under Section 139(4A) or Section 139(4B) or Section 139(4C) or Section 139(4D).

Documents needed to file ITR Forms

Form 16 and Form 26AS

House rent receipts

Investment payment premium receipts

Note: ITRs are annexure-less forms. So, you are not required to attach any document but you need to keep these documents for assessment or inquiry, etc.

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Precautions for filling ITR Forms

• Make sure your Aadhaar and PAN are linked.
• Ensure that the bank account where you want to receive your refund is pre-validated.
• Ensure you have chosen the correct ITR Form.

FAQs

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