Demystifying Income Tax Return Forms: Which One Should You Choose for Hassle-free Tax Filing?

 

Income Tax Return (ITR) forms are used by taxpayers to file their annual income tax returns with the Income Tax Department. There are different types of ITR forms available for different categories of taxpayers, depending on their sources of income and the nature of their business or profession. In this article, we will discuss the different types of ITR forms and their applicability.

 

1. ITR-1 (Sahaj)

ITR-1 or Sahaj is the simplest and most commonly used ITR form. It is applicable to individual taxpayers who have income from salary or pension, income from one house property, and income from other sources such as interest, dividends, or capital gains. This form is not applicable if the taxpayer has income from more than one house property or if the total income exceeds Rs. 50 lakhs.

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2. ITR-2

ITR-2 is applicable to individual taxpayers who have income from salary or pension, income from more than one house property, income from capital gains, and income from other sources. This form is not applicable if the taxpayer has income from business or profession.

 

3. ITR-3

ITR-3 is applicable to individuals and Hindu Undivided Families (HUFs) who have income from business or profession. This form is not applicable if the taxpayer has income from capital gains or if the taxpayer is eligible to file ITR-1 or ITR-2.

 

4. ITR-4 (Sugam)

ITR-4 or Sugam is applicable to taxpayers who have income from presumptive business or profession. This form is applicable to individuals, HUFs, and firms who have income from business or profession and whose total income does not exceed Rs. 50 lakhs.

 

5. ITR-5

ITR-5 is applicable to partnership firms, limited liability partnerships (LLPs), and association of persons (AOPs). This form is not applicable if the taxpayer has income from business or profession that is eligible to file ITR-4.

 

6. ITR-6

ITR-6 is applicable to companies other than those claiming exemption under Section 11 of the Income Tax Act. This form is not applicable to companies claiming exemption under Section 11 or to companies registered under the Indian Companies Act, 2013.

 

7. ITR-7

ITR-7 is applicable to taxpayers who are required to file returns under Section 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act. This form is applicable to trusts, political parties, and institutions eligible for exemption under Section 10 of the Income Tax Act.

 

In conclusion, the Income Tax Department has introduced different types of ITR forms to simplify the process of filing income tax returns for taxpayers. Each form is designed to cater to specific categories of taxpayers based on their sources of income and the nature of their business or profession. It is important for taxpayers to select the appropriate ITR form based on their income and file their income tax returns before the due date to avoid penalties and interest.