Which Tax Form Do I Need? Guide to ITR Forms for 2023-24 (2024-25)
ITR stands for Income Tax Return. The Income Tax Act of 1961 provides all the ITR forms and outlines the steps to follow. This article offers a detailed explanation of ITR and the various types of ITR forms available.
What is ITR?
ITR, or Income Tax Return, is a document where taxpayers report their income and tax liability to the income tax department.
The department has introduced seven different forms, namely ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7. Taxpayers are required to file their ITR before the specified due date. The appropriate form to use depends on factors such as the taxpayer’s sources of income, the amount earned, and their category (individuals, HUF, company, etc.).
Why file ITR?
– To request an income tax refund from the department.
– If you’ve earned from or invested in foreign assets during the financial year.
– When applying for a visa or loan.
– Regardless of profit or loss, if you’re a company or a firm.
– If you’ve incurred losses from business/profession or under capital gains, you won’t be able to carry them forward to the next years unless you file the return before the due date.
When do you have to file income tax returns (ITR) in India?
- If your gross total income exceeds the basic exemption limit.
| Age Group | Basic Exemption Limit |
| For individuals below 60 years | Rs 2.5 lakh |
| For individuals above 60 years but below 80 years | Rs 3.0 lakh |
| For individuals above 80 years | Rs 5.0 lakh |
Even if your income falls below the basic exemption limit, you must still file your tax return if you meet any of these criteria:
- You’ve deposited Rs. 1 crore or more in one or more current accounts with a bank. However, this requirement does not apply to deposits made in post office current accounts.
- You’ve deposited Rs. 50 lakh or more in one or more of your savings bank accounts.
- Your spending on foreign travel exceeds Rs. 2 lakh, whether for yourself or another person.
- Your electricity expenses surpass Rs. 1 lakh in the previous year.
- The tax deducted at source (TDS) or tax collected at source (TCS) is over Rs. 25,000 in the previous year. For senior citizens (above 60 years), this threshold is Rs. 50,000.
- If you’re a businessman and your total sales, turnover, or gross receipts are more than Rs. 60 lakh during the previous year.
- If you’re engaged in a profession and your gross receipts exceed Rs. 10 lakh during the previous year.
Which ITR Form Do You Need?
Discover the right income tax return form for you for the financial year 2022-23 with the help of the following infographic.
Once you determine the appropriate ITR form, click on the links below to delve deeper into each one.
ITR-1 or SAHAJ
This form is for resident individuals whose total income for the assessment year 2023-24 includes:
– Salary or pension income
– Income from one house property (except for cases with losses carried forward from previous years)
– Income from other sources (excluding lottery winnings and income from race horses)
– Agricultural income up to Rs. 5000.
Who Shouldn’t Use ITR-1 Form?
– If your total income exceeds Rs. 50 lakh
– If your agricultural income is more than Rs. 5000
– If you have taxable capital gains
– If you earn income from business or profession
– If you have income from more than one house property
– If you hold a position as a Director in a company
– If you’ve invested in unlisted equity shares during the financial year
– If you own assets outside India or have financial interests in any foreign entity
– If you’re a resident not ordinarily resident (RNOR) or non-resident
– If you earn any foreign income
– If you’re taxed on someone else’s income where tax is deducted at the source in their hands
– If tax has been deducted under Section 194N
– If tax payment or deduction has been deferred on ESOP
– If you have any carried forward loss or loss to be carried forward under any income head
ITR-2
ITR-2 is designed for individuals or Hindu Undivided Families (HUF) whose total income for the assessment year 2023-24 includes:
– Income from Salary/Pension
– Income from House Property
– Income from Other Sources (including Lottery Winnings and Income from Race Horses)
– If you are an Individual Director in a company
– If you have investments in unlisted equity shares during the financial year
– Being a resident not ordinarily resident (RNOR) or non-resident
– Income from Capital Gains
– Having any foreign income
– Agricultural income exceeding Rs. 5,000
– Owning assets outside India, including financial interests in foreign entities or holding signing authority in foreign accounts
– If tax has been deducted under Section 194N
– If tax payment or deduction has been deferred on ESOP
– If you have any carried forward loss or loss to be carried forward under any income head
Additionally, if the income of another person like a spouse or child is to be clubbed with the taxpayer’s income, this Return Form can be used if such income falls into any of the above categories.
The total income can exceed Rs. 50 Lakhs.
Who Shouldn’t Use ITR-2?
If your earnings for the assessment year 2023-24 come from business or profession, ITR-2 isn’t the right form for you. In such cases, you might need to consider using either ITR-3 or ITR-4.
ITR-3
The current ITR-3 Form is for individuals or Hindu Undivided Families (HUF) who earn income from a proprietary business or are engaged in a profession. Those with income from the following sources can file ITR-3:
– Running a business or profession
– Being an Individual Director in a company
– Having investments in unlisted equity shares at any time during the financial year
– The return may include income from House property, Salary/Pension, and Income from other sources
– Income of a person as a partner in a firm
In summary, individuals or HUFs who are ineligible to file ITR-1, ITR-2, and ITR-4 should use ITR-3.
ITR 4 or Sugam
The current ITR-4 is applicable to individuals, Hindu Undivided Families (HUFs), and Partnership firms (excluding LLPs) who are residents and have the following types of income:
– Business income under the presumptive income scheme as per section 44AD or 44AE
– Professional income under the presumptive income scheme as per section 44ADA
– Salary or pension income up to Rs. 50 lakh
– Income from one house property, not exceeding Rs. 50 lakh (excluding any brought forward loss or loss to be carried forward)
– Income from other sources, with income not exceeding Rs. 50 lakh (excluding income from lottery and racehorses)
Please note that individuals earning income from the mentioned sources as freelancers can also choose the presumptive scheme if their gross receipts do not exceed Rs. 50 lakhs.
The presumptive income scheme under sections 44AD, 44AE, and 44ADA is an option where individuals or entities derive income based on a presumed minimum rate, typically calculated as a percentage of gross receipts or gross turnover or based on the ownership of commercial vehicles. However, if the business turnover exceeds Rs. 2 crore, the taxpayer must file ITR-3.
Who Shouldn’t Use ITR-4 Form?
You shouldn’t use ITR-4 if:
– Your total income is over Rs. 50 lakh
– You earn income from more than one house property
– You own foreign assets
– You have signing authority in any account located outside India
– You earn income from any source outside India
– You’re a Director in a company
– You’ve invested in unlisted equity shares during the financial year
– You’re a resident not ordinarily resident (RNOR) or non-resident
– You have foreign income
– You’re taxed on someone else’s income where tax is deducted at the source in their hands
– Tax payment or deduction has been deferred on ESOP
– You have any carried forward loss or loss to be carried forward under any income head
ITR-5
ITR-5 is designed for firms, LLPs (Limited Liability Partnerships), AOPs (Association of Persons), BOIs (Body of Individuals), Artificial Juridical Persons (AJPs), Estates of deceased individuals, Estates of insolvent individuals, Business trusts, and investment funds.
ITR-6
For companies other than those claiming exemption under section 11 (income from property held for charitable or religious purposes), this return must be filed electronically.
ITR-7
ITR-7 is for individuals and companies who need to submit returns under various sections:
– Section 139(4A): Individuals receiving income from property held under trust or other legal obligation wholly or partly for charitable or religious purposes.
– Section 139(4B): Political parties whose total income exceeds the maximum amount not chargeable to income tax.
– Section 139(4C): Scientific research associations, news agencies, certain associations or institutions, funds, universities, educational institutions, hospitals, or medical institutions.
– Section 139(4D): Universities, colleges, or institutions not required to file returns under any other provision.
– Section 139(4E): Business trusts not obligated to file returns under any other provision.
– Section 139(4F): Investment funds mentioned in section 115UB, not obligated to file returns under any other provision.
| ITR Form | Applicable to | Salary | House Property | Business Income | Capital Gains | Other Sources | Exempt Income | Lottery Income | Foreign Assets/Foreign Income | Carry Forward Loss |
| ITR-1 / Sahaj | Individual, HUF (Residents) | Yes | Yes(One House Property) | No | No | Yes | Yes (Agricultural Income less than Rs 5,000) | No | No | No |
| ITR-2 | Individual, HUF | Yes | Yes | No | Yes | Yes | Yes | Yes | Yes | Yes |
| ITR-3 | Individual or HUF, partner in a Firm | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| ITR-4 | Individual, HUF, Firm | Yes | Yes(One House Property) | Presumptive Business Income | No | Yes | Yes (Agricultural Income less than Rs 5,000) | No | No | No |
| ITR-5 | Partnership Firm/ LLP | No | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| ITR-6 | Company | No | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| ITR-7 | Trust | No | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
FAQs:
1. What is the difference between various ITR forms?
- The different ITR forms cater to various types of taxpayers and their sources of income. For example, ITR-1 is for salaried individuals, while ITR-4 is for businesses and professionals opting for presumptive taxation.
2. How do I determine which ITR form is applicable to me?
- You can determine the applicable ITR form based on your sources of income, such as salary, business income, capital gains, or foreign assets. Assess your income sources and choose the form that best fits your situation.
3. Can I use the same ITR form for multiple financial years?
- No, you should use the ITR forms relevant to the specific financial year you’re filing for. Each year’s ITR form is designed to capture income and deductions specific to that year.
4. What documents do I need to fill out my ITR form?
- To fill out your ITR form, you’ll typically need documents like your PAN card, Aadhaar card, bank statements, salary slips, rent receipts, and investment proofs such as Form 16, TDS certificates, and details of assets and liabilities.
5. Is there a deadline for filing my income tax return using the appropriate ITR form?
- Yes, there is a deadline for filing income tax returns, typically July 31st for most individuals. However, the deadline may vary based on factors like taxpayer category and any extensions granted by the tax authorities. It’s crucial to file your return before the specified due date to avoid penalties and interest. For any queries, contact us, today!
