Which ITR Form should you file ?

Return Form with Brief Description

ITR – 1

For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakh

ITR – 2

For Individuals and HUFs not carrying out business or profession under any proprietorship

ITR – 3

For individuals and HUFs having income from a proprietary business or profession

ITR – 4S

For presumptive income from Business & Profession

ITR – 5

For persons other than,- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7

ITR – 6

For Companies other than companies claiming exemption under section 11

ITR – 7

It is applicable to a persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) (i.e., trusts, political parties, institutions, colleges, etc.).

ITR – V

It is the acknowledgement of filing the return of income.

The single largest change in the new return forms notified is a simplified one pager form (ie ITR 1) for Individuals having income from salary, pension, one house property and income from other sources.

Disclosure of cash deposited between November 9, 2016 and December 30, 2016

A new column has been inserted in all ITR forms to report cash deposited by taxpayers in their bank accounts during the demonetization period (ie, from November 9, 2016 to December 30, 2016). Taxpayers are required to fill up this column only if they have deposited cash in excess of INR 2 lakh during the demonetization period

Other Changes

Additional details pertaining to assets and liabilities by Individuals/ HUFs earning above INR 50 lakh. New columns have been inserted under “Schedule OS” to report unexplained income which will be taxed at the rate of 60 percent. Deduction under section 80EE of the Act. A new field has been provided in the new ITR forms under Schedule VI-A deduction to claim home loan interest under Section 80EE. In presumptive income person can segregate digital receipt and other receipt and take advantage of 6% presumptive taxation for receipts in digital mode.

Briefly explaining the above forms:

ITR – 1: Also known as SAHAJ is applicable to an individual having salary or pension income or income from one house property (not a case of brought forward loss) or income from other sources (not being lottery winnings and income from race horses). Return Form ITR – 1 (SAHAJ) can be used by an individual whose total income includes:

  1. Income from salary/ pension
  2. Income from one house property or
  3. Income from other sources

In a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used only when such income falls in any of the above categories.

 

Return Form ITR – 1 (SAHAJ) cannot be used by an individual in following cases:

  1. Where the total income for the AY exceeds Rs. 50 Lakhs
  2. Where total income for the year includes income from house property
  3. Where total income for the year includes income from race horses
  4. Where total income for the year includes income chargeable under capital gains
  5. Where total income for the year includes agricultural income of more than Rs. 5000
  6. Where total income for the year includes income from business or profession
  7. Who is claiming relief u/s 90 and 91
  8. Who is having assets located outside India or signing authority in an account located outside India
  9. Any resident having income from any source n India

ITR – 2: It is applicable to an individual or a Hindu Undivided Family having income from any source other than “Profits and gains of business or profession”. Return Form ITR – 2 can be used by an individual or a Hindu Undivided Family whose total income for the year includes:

  1. Income from Salary / Pension; or
  2. Income from House Property; or
  3. Income from Capital Gains; or
  4. Income from Other Sources (including winnings from lottery and income from race horses).

Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this Return Form can be used if income to be clubbed falls in any of the above categories.

Return Form ITR – 2 cannot be used by an individual whose total income for the year includes income from Business or Profession.

ITR – 3: It is applicable to an individual or a Hindu Undivided Family who is carrying on a proprietary business or profession.  During last AY individual with business and profession income was supposed to file ITR 4 which has now changed to ITR 3. Form ITR – 3 cannot be used by any person other than an individual or a HUF. Further, an individual or a HUF not having income from business or profession cannot use ITR – 3.

ITR – 4S: Also known as SUGAM is applicable to individuals and Hindu Undivided Family who have opted for the presumptive taxation scheme of section 44AD/44AE.Form ITR – 4S (SUGAM) can be used by an individual/HUF whose total income for the year includes:

(a) Business income computed as per the provisions of section 44AD or 44AE or

(b) Income from salary/pension; or

(c) Income from one house property (excluding cases where loss is brought forward from previous years); or

(d) Income from other sources (excluding winnings from lottery and income from race horses).

Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used where income to be clubbed falls in any of the above categories.

Form ITR – 4S (SUGAM) cannot be used by an individual/HUF:

Whose total income for the year includes income from more than one house property.

Whose total income for the year includes income from winnings from lottery or income from race horses.

Whose total income for the year includes income chargeable to tax under the head “Capital Gains”.

Whose total income for the year includes agricultural income of more than Rs. 5,000.

Whose total income for the year includes income from speculative business and other special incomes.

Whose total income for the year includes income from profession as referred to in section 44AA(1).

Whose total income for the year includes income from agency business or income in the nature of commission or brokerage.

Who claims relief under section 90, 90A and/or section 91.

Who is a resident and ordinarily resident and has any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.

In case of a taxpayer who is engaged in any business eligible for the presumptive taxation scheme of section 44AD or section 44AEbut he does not opt for the presumptive taxation scheme, then such a taxpayer has to maintain the books of account of the business as per the provisions of section 44AA and has to get these accounts audited. In such a case he cannot use ITR 4S.

In case of a taxpayer who is engaged in any business eligible for the presumptive taxation scheme of section 44AD or section 44AE but he does not opt for the presumptive taxation scheme, then such a taxpayer has to maintain the books of account of the business as per the provisions of section 44AA and has to get his accounts audited. In such a case he cannot use ITR 4S.

ITR – 5: This Form can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), co-operative society and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) shall not use this form (i.e., trusts, political parties, institutions, colleges, etc.)

ITR – 6: It is applicable to a company, other than a company claiming exemption under section 11 (exemption under section 11 can be claimed by charitable/religious trust).

ITR – 7: It is applicable to a person’s including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) (i.e., trusts, political parties, institutions, colleges, etc.)

ITR – V: It is the acknowledgement of filing the return of income.

 

Now even Aadhaar PAN Linking is important for enabling to file Income Tax Returns. You may refer our earlier post here.

aadhaar pan

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