Each year, individuals earning income higher than the basic exemption limit are required to file their income tax returns (ITRs) online. If you belong to this category, and if you are not otherwise required to be audited under the Income Tax Act, 1961, you will generally need to file your ITR by July 31 of the relevant assessment year.
There are different types of ITR forms that are available for taxpayers in India. The first step to filing your tax returns as required is to identify the type of ITR form applicable to you. So, let’s take a closer look at the various types of ITR forms and the individuals or entities that they are applicable to.
The Different Types of ITR Forms Available in India
The following types of ITR forms are available, based on the types of income earned by an assessee.
1. ITR 1 (Sahaj)
The ITR 1 form is applicable for salaried individuals and pensioners. You must choose the ITR 1 form if you are an individual who is a resident with total income up to ₹50 lakhs, and if you have the following types of income to report during the financial year.
- Income from salary or pension
- Income from single house property
- Income from other sources such as interest income (not including lottery winnings, gambling and betting)
- Agricultural income of up to ₹5,000
2. ITR 2
Like the ITR 1 form, ITR 2 is also applicable for individual taxpayers. In addition to this, Hindu Undivided Families (HUFs) can also use this tax return. The ITR 2 form is applicable to you if you have any of the following types of income to report.
- Income from salary or pension
- Income from multiple house properties
- Income from other sources such as interest income (including winnings from lottery, gambling and betting)
- Investing in any unlisted equity shares any time during the relevant financial year
- Income from capital gains
- Income from foreign assets
- Agricultural income exceeding ₹5,000
The ITR 2 form is also applicable if you are —
- A resident not ordinarily resident (RNOR)
- A non-resident
- An individual director in a company
3. ITR 3
The ITR 3 form is for individuals and Hindu Undivided Families (HUFs) with income from business or profession. In other words, this form is generally the right choice for taxpayers who cannot file ITR 1, ITR 2 or ITR 4.
The categories of taxpayers that this form is applicable to include the following.
- Individuals involved in a business or profession
- Individual directors in companies
- Individuals and HUFs having invested in any unlisted equity shares any time during the financial year
- Individuals with income earned from being a partner in a partnership firm
4. ITR 4 (Sugam)
This income tax return is suitable for individuals, HUFs, and firms (other than LLP) that have chosen the presumptive taxation scheme under section 44AD, 44ADA or 44AE of the Income Tax Act, 1961. Some examples of the types or limits of income that this ITR can be used for include the following.
- Income from business or profession taxable as per the presumptive income scheme under section 44AD or 44AE
- Income from profession as per presumptive income scheme under section 44ADA
- Income from salary or pension not exceeding ₹50 lakhs
- Income from one house property
- Income from other sources (not including income from lottery, gambling and betting on race horses )
5. ITR 5
ITR 5 is a tax return that is not for individuals or HUFs. Instead, it applies to various non-individual tax-paying entities such as the following:
- Association of Persons (AOPs)
- Body of Individuals (BOIs)
- Artificial Judicial Persons (AJPs)
- Partnership firms
- Limited Liability Partnerships (LLPs)
- Estates of deceased
- Estates of insolvent
6. ITR 6
ITR 6 is applicable for companies in general. That said, this ITR form is not for companies claiming an exemption under section 11 of the Income Tax Act for income earned from property that is held for religious or charitable purposes.
7. ITR 7
ITR 7 applies to assessees like political parties, trusts, educational institutions, research associations and entities with income earned from property held for religious or charitable purposes. These entities are typically required to file income tax returns under specific sections of the Income Tax Act like the following:
- Section 139(4A)
- Section 139(4B)
- Section 139(4C)
- Section 139(4D)
- Section 139(4E)
- Section 139(4F)
Conclusion
Choosing the right type of ITR form is crucial, because filing the wrong ITR form will invalidate your tax return. Generally, if you are an individual, you will have to choose from tax return forms like ITR 1, ITR 2, ITR 3 and ITR 4. The form that is applicable to you depends on the types of income you have earned during the year and the threshold limits applicable. Make sure you choose the right form and file your tax return on time.
