Confused About Which ITR Form to File? Here’s a Beginner’s Guide

Every taxpayer needs to furnish the income tax earned during the year through the applicable ITR forms. The ITR form which is applicable to you depends on the type and the amount of income of the taxpayer.

What Is ITR?

Income Tax Return (ITR) is a form used by taxpayers to report their income and taxes to the Income Tax Department. There are seven ITR forms (ITR-1 to ITR-7), and the correct form depends on factors like income source, income amount, and taxpayer category (individual, HUF, company, etc.). Filing must be done before the specified due date each year.

Which ITR Form Is For You?

ITR 1 Form is for salaried individuals with income up to Rs 50 lakh, ITR 2 Form is for individuals with capital gains, ITR 3 Form is for individuals with income from business or profession, ITR 4 Form  is for individuals with business and profession less than or equal to Rs 50 lakh, ITR 5 Form is for organisations, LLPs, AOPs, and BOIs, ITR 6 Form is for companies and ITR 7 Form is for charitable trusts.

ITR 1: ITR-1, also known as Sahaj, is the income tax return form for resident individuals (not HUFs or companies) with total income up to ₹50 lakh. It is applicable for those earning income from salary or pension, income from one house property, agricultural income, long-term capital gains, and other sources.

ITR2: ITR-2 is the income tax return form for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. It is applicable when your total income includes income from salary or pension, house property, other sources, if you are an individual director in the company, investments in unlisted shares, income from capital gains, have foreign income, agricultural income more than Rs 5,000, and financial assets outside India.

Tax payers with Income from Business or Profession cannot file ITR-2.

ITR 3: ITR-3 is the Income Tax Return form for individuals and Hindu Undivided Families (HUFs) who have income from a business or profession. The persons having income who are eligible to file ITR-3 include individuals having income from business and profession, individuals with investments in unlisted equity shares at any time during the financial year and income of a person as a partner in the firm.

ITR 4: ITR-4 (also known as Sugam) is the Income Tax Return form for individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) who have opted for the presumptive income scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act. People with total income not exceeding Rs 50 lakh, business and professional income, income from salary or pension, income from other sources, and long-term capital gains income.

ITR 5: ITR-5 is the Income Tax Return form applicable to entities other than individuals, HUFs, companies, and those filing ITR-7. It is meant for partnership firms, LLPs, AOPs, BOIs, and other similar entities.

ITR 6: ITR-6 is the Income Tax Return form applicable to companies other than those claiming exemption under Section 11 (i.e., income from property held for charitable or religious purposes).

ITR 7: ITR-7 is the Income Tax Return form applicable to persons (including companies) who are required to file returns under sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act, primarily related to charitable, religious, and specified institutions.

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