A tax return is defined as a form or different types of forms filed with a taxing authority which reports income, expenses, and other pertinent tax information. Tax returns make it simple for taxpayers to calculate their tax liability, schedule tax payments and request refunds for the overpayment of taxes. All taxpayers who are filing their income tax returns are required to determine the type of income tax return (ITR) form they need to fill before actually filing their returns. The form to be filled is solely dependent on the income that the taxpayer earns, or in certain cases if the taxpayer holds assets in a country other than India or earns any form of income from a country other than India.
In total, there are almost 9 types of ITR forms available for a tax payer to file his taxes. However, only the following forms are to be taken into consideration by individuals when filing returns as per the Central Board of Direct Taxes in India:
ITR-1
ITR-2
ITR-2A
ITR-3
ITR-4
ITR-4S
The following income tax return forms are applicable only for companies and firms:
ITR-5
ITR-6
ITR-7
ITR-1
Also known as the Sahaj form, this income tax return form is to be filed solely by an individual taxpayer. Any other assessee liable to pay tax, is not eligible to avail of this form for filing their returns. This form is applicable for the following people:
A person who earns his income via salary or through other means such as pension
A person who earns his livelihood from a single housing property
An individual who has no income from no other business or who have no income from the sale of any assets i.e. capital gains
Individuals who do not own any assets or property in countries apart from India
An individual who has no source of income from any country outside India
A person whose income from agriculture is below Rs. 5,000
A person whose source of income is from various investments or sources like investments, schemes or fixed deposits etc.
Individuals who have not earned income from any windfall such as lotteries, horse racing etc.
People who want to accumulate their spouse’s or underage child’s income with their own, as long as the income to be clubbed is in accordance with the criteria mentioned above.
ITR-2A
Introduced in the assessment year 2015-16, The ITR-2A form is a new income tax return form. This form can be used by a Hindu Undivided Family (HUF) or an individual taxpayer. The ITR-2A form is applicable for the following people:
People whose source of income i through salary or through means such as pension
People who are also earning income from more than one housing property
A person who has no income from any other business or who have no income from the sale of any assets i.e. capital gains
People who tend to earn income from different investments or sources such as Fixed Deposits, Investments, Shares etc.
A person who does not own any property or assets in countries other than India
A person who does not have a source of income from any country outside India
A person whose income from agriculture is below Rs 5,000
Individuals who have not earned income from any windfall such as lotteries or horse racing
ITR-2
The ITR-2 Form is a type of ITR form which is generally used by individuals who have accrued income through the sale of assets or property. Also, this form is useful for individuals who earn income from countries outside India. In most cases, individuals or Hindu Undivided Families (HUF) can avail of this form to file their IT returns. This form is applicable for the following persons:
People who earn income through salary or through means such as pension
A person whose source of income is through the sale of assets or property in India i.e. capital gains
A person who tends to earn income from more than one housing property
People who don’t earn money from any business venture
A person who own assets in countries outside of India
People who earn income from countries outside of India
A person whose income from agriculture is above Rs 5,000
A person who gets his income from any windfall like lotteries or horse racing
ITR-3
The ITR-3 Form is useful for an individual taxpayer or a Hindu Undivided Family, who solely operate as a partner in a firm but who do not conduct any business under the firm. This is also applicable for individuals who do not earn any income from the business conducted by the firm. This form is usually filed by those taxpayers whose taxable income earned from business is only in the form of the following:
Salary
Commission
Bonus
Interest
Remuneration
ITR-4
This type of ITR form is useful for those individuals who conduct a business or who earn income through a profession. This form is applicable for all types of businesses, undertaking or profession, without any limit on the income earned. Taxpayers can also club any income they receive from windfalls, speculation, salaries, lotteries, housing properties etc., along with the income earned from their business. An individual with any profession, right from shopkeepers, doctors or designers to agents, retailers and contractors, is eligible to file their ITR using this form.
ITR-4S
Also known as Sugam form, the ITR-4S form can be used by any individual or Hindu Undivided Family (HUF) for filing their income tax returns. This form is applicable for the following persons:
Individuals who earn income from any business
Individuals who earn income from a single housing property
Individuals who do not earn income through the sale of assets or property in India i.e.: capital gains
Individuals whose income from agriculture is below Rs 5,000
Individuals who do not own any assets or property in countries other than India
Individuals who do not earn income from any country outside India
This form is useful in special circumstances and is applicable to businesses where any income earned is based on a presumptive method of calculation.
ITR-5
The ITR-5 form is used only by the following bodies to file income tax returns:
Firms
Limited Liability Partnerships (LLPs)
Body of Individuals (BOIs)
Association of Persons (AOPs)
Co-operative Societies
Artificial Judicial Persons
Local Authorities
ITR-6
Except those companies or organisations that claim tax exemption as per Section 11, the ITR-6 form is used only by all companies. Organisations that can claim tax exemptions as per Section 11 are organisations in which the income received is accumulated from the property used for the purpose of religion or charity. This particular income tax return form is only available to be filed online.
ITR-7
Those individuals or companies that are required to submit their returns under the following sections are required to file their income tax returns through ITR-7:
Section 139(4A) - Under this section, returns can be filed by individuals who receive income from any property that is held for the purpose of charity or religion in the form of a trust or legal obligation
Section 139(4B) - Under this section, returns are to be filed by political parties provided their total income earned is above the non-taxable limit
Section 139(4C) - Under this section, returns are to be filed by the following entities:
Any institution or association mentioned under Section 10(23A)
Any association involved with scientific research
Any institution mentioned in Section 10(23B)
Any news agency
Any fund, medical institution or educational institution
Section 139(4D) - Under this section, returns are to be filed by entities such as colleges, universities or any other such institution wherein income returns or loss are not required to be provided in accordance with other provisions outlined in this section.
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