Which ITR is for whom?

Written by Ravi Sankar Robbi

Updated on:

Introduction

Income Tax Return (ITR) is a form in which taxpayers communicate their source of income and losses to the income tax department every year.

Choosing the correct ITR form is essential as the wrong one may turn your ITR defective. In this article, let’s understand all the different ITR forms available and which one to choose while filing your Income Tax Return (ITR)

Types of ITR

For filing Income Tax Returns (ITRs), there are 7 ITR forms available under Income Tax Act. Depending on the category of taxpayer and nature of income, they need to choose the respective form applicable every year.

ITR1

This form is ONLY for Individuals (who are Resident and ordinarily resident) who is having either or all of the following incomes:

  • Income from Salary / Pension
  • Income from House Property (one property)
  • Interest Income / Dividend / Family Pension
  • Agricultural Income not more than Rs. 5,000

and Income from all the above sources should not be more than Rs. 50 Lakh

Also read: ITR1 is for whom? (A detailed article on ITR-1 applicability)

ITR2

This form is for Individuals & HUF who is having either or all of the following incomes:

  • Income from Salary / Pension
  • Income from House Property (one or more properties)
  • Capital Gains
  • Income from Other sources (including lottery income & gaming income)

So if you are having any other income other than business or professional income, then you can file ITR2.

ITR3

This form is for Individuals & HUF who is having either or all of the following incomes:

  • Income from Salary / Pension
  • Income from House Property
  • Business Income / Professional Income
  • Capital Gains
  • Income from Other sources

For any reason, if you are unable to file any other Form, then ITR3 is for you.

ITR4

This form is for Individuals, HUF & Firms (other than LLPs) who are Residents and have either or all of the following incomes:

  • Income from Salary / Pension
  • Income from House Property (one property)
  • Interest Income / Dividend / Family Pension
  • Agricultural Income not more than Rs. 5,000 and
  • Presumptive income from Business or Profession u/s 44AD, 44ADA & 44AE

Do remember, total income should not be more than Rs. 50 Lakh.

Simply put, if you are having all sources of income mentioned for ITR1 and want to declare your income under Presumptive Taxation (without the maintenance of accounts), then you may go for ITR4.

ITR5

This form is for Firms (including LLPs), AOP, BOI and AJP.

ITR6

This form is ONLY for Companies other than companies claiming exemption u/s 11

ITR7

This form is for the persons who are required to furnish return u/s 139(4A), 139(4B), 139(4C) & 139(4D)

How to choose your ITR

Every year depending on the nature of incomes/losses, you need to choose the right ITR form.

For instance, if you are having only Salary income and Bank interest, then ITR1 is sufficient. And next year, in addition to these sources if you have earned some LTCG from the stock market, then you need to file ITR2.

This way, each year you need to figure out the form and file it before the due date.

What happens if you choose the wrong ITR

Furnishing the wrong ITR form will make your ITR defective. If your ITR is defective, as soon as you get the communication from the IT dept, you need to rectify the defect within 15 days from the receipt of such notice. Otherwise, it will be deemed as non-filing of return and consequences for non-filing of ITR will follow.

Conclusion

So, always ensure to check the correct ITR form as per your nature of income and file it within the due dates to avoid unnecessary complications.

Hope you enjoyed reading the article. Still have doubts, please ask in the comments section. Thank you for your time.

Author is a Qualified CMA with an experience of more than 8 years in the industry. He is also an All India Rank holder in both Inter (AIR-26) & Final (AIR-46) examinations of ICAI. He loves to writes articles on Income Tax & GST.

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