In order to correctly declare your income to the Government by filing your Income Tax Returns (ITR), it is necessary to file the same using the correct Form applicable to you.
The ITR applicable to you would depend upon your residential status, the nature of income earned and threshold limit, and also whether you are a director or shareholder in any Company, etc.
Seven forms; ITR-1 to ITR-7, have been prescribed for different types of taxpayers.
Let us understand the notable aspects of the different Forms which you need to consider while filing ITR.
ITR-1 (Sahaj): The most simple form, ITR-1 (Sahaj) is required to be filed by ordinarily resident individuals and HUFs whose total income does not exceed INR 50 lakh, and having income from salaries, one house property, other sources (interest, etc.), and agricultural income up to INR 5,000. It is pertinent to remember that individual taxpayers having income from business, profession, capital gains or more than one house property cannot use ITR-1.
ITR-2: This form is applicable for individuals and Hindu Undivided Families (HUFs) not having business income but not eligible to file ITR-1. In other words, this form is for those taxpayers, whose income as mentioned for ITR-1 exceeds INR 50 lakhs, and also having income from capital gains, more than one house property, foreign income and/or holding foreign assets, holding Directorship in any Company and holding equity shares in any unlisted Company.
ITR-3: This return form is applicable for all taxpayers having income as mentioned for ITR-2 criteria, but also having income from business or profession, or is a partner of any Firm.
ITR-4 (Sugam): Another simple form ITR-4 (Sugam) is applicable for resident individuals, HUFs and firms (other than LLPs) with total income of up to INR 50 lakhs and having income from small business or profession taxable under presumptive income provisions of Sections 44AD, 44ADA or 44AE of Income Tax Act, 1961. It may be noted that taxpayers having income from capital gains cannot opt for ITR-4 as well.
ITR-5: This Form is required to be filed by all categories of taxpayers other than individuals and HUFs (where ITR-1 to ITR-4 is applicable), companies (where ITR-6 is applicable) or charitable trusts/ institutions (where ITR-7 applies). Thus, ITR-5 is applicable for partnership firms (other than those qualifying for ITR-4), Limited Liability Partnerships (LLPs), Association of Persons (AOPs), Body of Individuals (BOIs), etc., to whom no other form applies.
ITR-6: This Form is applicable to Companies not claiming exemption under Section 11, i.e. Income from property held for charitable or religious purposes.
ITR-7: This Firm is applicable to persons (being an Individual, Firm, HUF or any other entity) and Companies which are required to file their returns under Sections 139 (4A) to (4F). In other words, taxpayers whose income is from property used either solely or partially for charitable or religious trust and such property must be held under a legal obligation or trust – Section 139(4A); Political Parties – Section 139(4B); Associations conducting scientific research, news agencies, Associations listed u/s 10(23A) and 10(23B) – Section 139(4C); Schools, colleges, and institutions not covered under any other section of the Income Tax Act – Section 139(4D); Business Trust – Section 139(4E); Investment Fund – 139(4F) are required to use this Form for filing their ITR.
An important aspect of the ITR Forms notified for FY 2019-20 is that they have been revised to incorporate the benefits of various timeline extensions granted by the Government due to Covid-19 lockdown.
This chart can be an easy ready-reckoner:
ITR Form |
Applicable to |
Salary |
House Property |
Business Income |
Capital Gains |
Other Sources |
Exempt Income |
Lottery Income |
Foreign Assets/Foreign Income |
Carry Forward Loss |
ITR-1 / Sahaj |
Individual, HUF (Residents) |
Yes |
Yes (One House Property) |
No |
No |
Yes |
Yes (Agricultural Income less than INR 5,000) |
No |
No |
No |
ITR-2 |
Individual, HUF |
Yes |
Yes |
No |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
ITR-3 |
Individual or HUF, partner in a Firm |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
ITR-4 / Sugam |
Individual, HUF, Firm |
Yes |
Yes (One House Property) |
Presumptive Business Income |
No |
Yes |
Yes (Agricultural Income less than INR 5,000) |
No |
No |
No |
ITR-5 |
Partnership Firm/ LLP |
No |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
ITR-6 |
Company |
No |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
ITR-7 |
Trust |
No |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
This is such an important and essential information for everyone for sure
Thanks for such an informative post… surely going to help a lot of people. Thanks once again
ITR is something everyone should be aware of.. Thanks for such an informative post.
Thank you for writing such a detailed article in a very simple language. I found answers to all my questions here.
I always thought there were 2 ITR; one for salaried and one for self-employed professionals. Thanks for improving my knowledge.
Very informative Post. I got to know many things through reading this.
This is a very useful information. I have been filing taxes online all by myself so I am aware of some of these terms but not all. This is really good as it explains me the other information.
Your article clear all my doubts of of income tax form thank you so much keep coming with such useful article
My dad was discussing about income tax with my brother, today… I will share this with them!
ITR form ways confuses me you have explained the nuances very simply in this post. I am bookmarking this for my reference.
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Thanks for sharing this much needed post, for amateurs like me.
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