Filing taxes may appear overwhelming due to the various slabs, exemptions and the different Income Tax Return (ITR) forms issued by the IT department. This confusion is especially prevalent among first-time taxpayers. It’s crucial to understand the types of ITR forms before filing your income tax return.
Different Types Of ITR Forms
The Income Tax Department has introduced seven forms to date: ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7. It’s essential to file your ITR on or before the specified due date, and the choice of the appropriate form depends on your income sources, the amount earned and your taxpayer category (individuals, HUF, company, etc.).
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Which ITR Form Is Right For You?
ITR-1
Designed for individuals residing in India with a total income up to Rs 50 lakh. Salaried individuals earning income from salary, house property, and other sources can use this form. Not applicable for NRIs.
ITR-2
Suitable for individuals and HUF with income other than from business or profession. This form covers income from salary, house property, capital gains, and other sources. Salaried individuals with gains or losses from buying and selling shares should use ITR-2.
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ITR-3
Intended for individuals reporting income from business or profession. Salaried individuals with income from intraday trading, futures, and options should file ITR-3. It covers income from salaries, house property, capital gains, business or profession, and other sources.
ITR-4
Applicable for individuals, HUF, and partnership firms opting for the presumptive scheme of taxation. It’s for businesses with a turnover up to Rs 2 crore (section 44AD) or professions with a turnover up to Rs 50 lakh (section 44ADA). Freelancers engaged in a notified profession can use ITR-4.
ITR-5
Designed for partnership firms, LLP, AOP, and BOI. Business entities like LLP, partnership firms, AOP, and BOI can file ITR-5 for reporting income from business, profession, and any other source.
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ITR-6
This is meant to file income from business or profession and any other sources of income.
ITR-7
Applicable to companies, associations, and trusts claiming income tax exemption.
Understanding these forms ensures you choose the right one based on your income sources and taxpayer category.
