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Income Tax

Income tax returns are forms in which taxpayers file information regarding their earned income and the respective tax applicable to the Income Tax Department. There are different types of income tax return forms depending on the taxpayer’s category and income type.

ITR-1 Form

This form is also known as the Sahaj form. Individual taxpayers should go for ITR 1 filing. Any other taxpayer is not eligible to choose this form for ITR returns. The following individuals can apply for this form:

  1. An individual who draws income from salary or pension.
  2. An individual whose income is solely dependent on single housing property.
  3. A person without any income from capital gains and other business.
  4. An individual who is not an owner of any foreign asset or does not have any foreign source of income.
  5. An individual whose agricultural income is up to Rs. 5000.
  6. A person with additional sources of income like other investments, fixed deposits, etc.
  7. Any individual without having any income from winning lotteries, horse racing, and other windfalls.
  8. Individuals who want to club their spouses’ or underage children’s income with theirs.

ITR-2 Form

ITR 2 income tax is eligible for those individuals who have their income by selling assets or properties. Individuals having incomes from outside of India can also use this form. HUFs can also apply for ITR 2 form to file income tax returns. Individuals belonging to the following categories can apply for ITR 2 forms:

  1. Individuals who accrue income by means of salary or pension.
  2. One whose income source depends on capital gains, that is, from the sale of an asset or property. 
  3. In case a person’s income is possibly coming from more than one house property.
  4. Owner of foreign assets and one whose income source is outside India.
  5. A person whose agricultural income is more than Rs.5000.
  6. People with incomes from winning a lottery etc.
  7. If an individual is a director in a company. 
  8. Non-residents and RNOR.

ITR-3 Form

Individual taxpayers or HUFs operating as partners in a firm without conducting any business under the firm are eligible to apply for ITR 3. Applicants having the following income sources are eligible to file ITR 3:

  1. Incomes from investments on unlisted equity shares.
  2. Individuals continuing a business or profession are eligible.
  3. Company director.
  4. Incomes coming from house property, pension, salary, or other sources.
  5. A person having income by being a partner in a firm.

ITR-4 Form

ITR 4 means that individuals who run a business and accrue income from it or other professions can file for IT returns by using this form. Taxpayers from professions like doctors, shopkeepers, designers, retailers, agents, contractors, etc.,  can file their ITR using this form. The following can apply for this form:

  1. Individuals earning income from businesses.
  2. One who has a single house property and earns income through it.
  3. Taxpayers not having income via capital gains or selling of assets.
  4. If the agricultural income of a person is below Rs. 5000, he can file ITR 4.
  5. Individuals not owning properties or assets outside India.
  6. An applicant whose source of income is within India.
  7. This form is also applicable to businesses where the income earned depends on a presumptive scheme under Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act.

ITR-5 Form

Business trusts, firms, etc.,  must opt for this form to file ITR. ITR 5 means forms that are eligible for partnership firms or LLPs. The following bodies can file IT returns using this form:

  1. LLPs (Limited Liability Partnerships).
  2. Co-operative societies.
  3. Local authorities.
  4. BOIs (Body of Individuals).
  5. Artificial judicial persons.
  6. Firms.
  7. AOPs (Association of Persons).
  8. Estate of the deceased and insolvent.
  9. Investment funds.
  10. Business trusts.

ITR-6 Form

ITR 6 means an income tax return form eligible for companies to file tax returns. Companies can file income tax by this form only electronically. Following are the bodies and the income sources eligible for this form:

  1. All companies except the ones claiming exemption under Section 11.
  2. Incomes earned from housing property.
  3. Business incomes.
  4. Incomes from multiple sources.

ITR-7 Form

Individuals or companies required to furnish returns under Section 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F) must utilise ITR 7 form to file income tax returns.

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