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Types of ITR forms – Which Income Tax Form should you submit

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Just Two weeks to the tax filing deadline and still if your are confusing on deciding which form to submit when filing your tax returns. Don’t worry. In this post you get to know about different types of ITR forms and complete guide to decide your suitable ITR form. 

Before we start our discussion on the 7 ITR forms, it is indispensable to know the meaning of following financial terms in an easy and understandable language.

  • Assessee – It refers to every person or company (being an artificial person) who is liable to pay tax under the Income Tax Act, 1961.
  • Previous Year – It refers to the last financial year in which the income liable to tax was earned i.e. for income tax returns to be filed from 1st April, 2016 onwards, the previous year will be 01-04-2015 to 31-03-2016.
  • Assessment Year – It refers to the year in which the income of previous year is assessed i.e. year succeeding the previous year. E.g. for previous year ending 31-03-2016, the relevant assessment year will start from 01-04-2016 and end on 31-03-2017.

ITR to file

Which ITR Form is applicable to you? – A quick guide to the various ITR Forms

ITR-1 or Sahaj

Individuals who earned following incomes in the previous financial year are eligible to file ITR-1:

  • Salary or pension
  • House property income (single house only)
  • Other Sources income (e.g. Interest)
  • Agricultural Income more than Rs. 5000

Following persons are not eligible to file ITR-1:

  • Hindu Undivided Family
  • Individual having following incomes
  • Income earned from lottery or horse race
  • Income from foreign Assets
  • Any exempt income more than Rs. 5000

ITR-2

Individuals and HUF who earned following incomes during the previous year, in addition to incomes mentioned in ITR-1, are eligible to file ITR-2:

  • Income from lottery and winning of horse race
  • Income under the head ‘Capital Gains’

Following persons are not eligible to file ITR-2:

  • Individuals or HUF having income earned from business or profession

ITR-2A

Individuals who have earned following incomes in the previous year are eligible to file ITR-2A:

  • Income from Salary
  • Income from two or more house properties and DO NOT have any capital gains.
  • Long Term Capital Gains which are exempt from tax i.e. transactions on which Securities Transaction Tax has been paid.
  • NRIs also can file ITR-2A – however residents who have foreign assets or foreign income CANNOT file this ITR-2A form.

ITR-2A does not apply to following:

  • Individuals who have earned capital gains in the previous year and if such capital gains are not exempt from tax.
  • Income from business or profession
  • Residents having foreign assets or income from any source outside India.

ITR 3

Individuals and HUF whose income earned in the previous year includes the following are eligible to file ITR-3:

  • ITR 3 is meant for individuals and HUF who are partners in a firm; but do not carry business under propreitorship.
  • Income from partnership such as salary, interest, commission, remuneration etc. (even if such income is exempt, ITR-3 applicable not Form ITR-2).

ITR-3 does not apply to individuals who have following incomes:

This Form should not be used by an individual whose total income for the AY 2015-16 includes “Income from Business or Profession” under any proprietorship.

ITR 4

Individuals and HUF whose income earned in the previous year includes the following are eligible to file ITR-4:

  • Income from proprietary business/ profession (only proprietary, not partnership)
  • Salary or Pension
  • Income from more than 1 house property
  • Other Sources Income (e.g. Interest from Investments)
  • Income from capital gains
  • Income from foreign assets

ITR-4S or Sugam

Individuals and HUF whose income earned in the previous year includes the following are eligible to file ITR-4S:

  • Presumptive income but gross receipts below Rs. 1 crore in previous year.
  • Salary or Pension
  • Income from only 1 house property
  • Other Sources Income (e.g. Interest from Investments)
  • Agricultural Income below 5000

ITR-4S does not apply to individuals who have following incomes:

  • Income earned on foreign assets i.e. foreign income
  • Income earned as capital gains
  • Speculative Income
  • Income from more than one house

ITR-5

Following persons are eligible to file ITR-5:

  • Limited Liability Partnership firms
  • Partnership firms
  • Body of individuals
  • Association of persons
  • cooperative society and local authority

ITR-6

This form applies to following companies:

  • Companies other than those earning income from property held for charitable purposes i.e. the companies claiming exemption under section 11 of the act are not covered.

It must be noted here that this Income tax return form can be filed only electronically and not in paper form.

ITR-7

Following persons (including companies) are required to file ITR-7 in paper form only:

  • Persons who are required to furnish a ROI under following sections of the act:
  • Section 139 (4A)-Persons receiving income from property held under trust or legal obligation, wholly or partly for religious or charitable purposes.
  • Section 139 (4B)-Political parties whose income without application of provisions of Section 139A exceeds the maximum amount not chargeable to tax.
  • Section 139 (4C)- Institutions referred to in Section 10(23A) or 10(23B), news agency, scientific association, any educational or medical institutions
  • Section 139 (4D) – every university, fund, college or institution not required to furnish a ROI under any other provisions of this section.

This ITR 7 return has to be paper filed.

Hope you find above information useful. Do share your views below.

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