Know your Income Tax Return Forms

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

 

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