Types of ITRs

The ITR 1 or SAHAJ form is for resident Indians meeting specific criteria. It applies to those with income from pension or salary, single house property (except for carried forward losses), or agriculture (not exceeding INR 5,000). Total income should not exceed INR 50 lakh, and other sources like horse race winnings are allowed.

However, ineligible individuals have total income above INR 50,000, taxable capital gains, multiple house properties, unlisted equity investments, NRI/RNOR status, agriculture income over INR 5,000, profession/business income, directorship, foreign property/income, or foreign assets.

The ITR-2 form is specifically designed for individuals and Hindu Undivided Families (HUFs) meeting certain criteria. It is applicable if the individual's income exceeds INR 50 lakh and is generated from sources such as pension or salary, house property, winning a lottery or horse races, directorship in a company, agricultural income exceeding INR 5,000, capital gains, unlisted equity share investments during the financial year, or foreign income and assets.

However, individuals who earn income from a profession or business cannot use this form.

The ITR-3 form is specifically designed for individuals and Hindu Undivided Families (HUFs) who earn income from a profession or proprietorship business. It is applicable to individuals generating income from a profession or business, those with investments in unlisted equity shares at any point during the financial year, individuals who are partners in a firm, individuals serving as directors of a company, and those with income from sources such as pension, salary, house property, or any other source. Additionally, businesses with a turnover exceeding INR 2 crore can also choose the ITR-3 form for their tax filing requirements.

The ITR 4 (or Sugam form) is specifically designated for HUFs (Hindu Undivided Families), Partnership Firms, and resident individuals who generate income from a profession or business in India. However, LLPs (Limited Liability Partnerships) are not eligible to choose this form. Individuals who have opted for the presumptive income scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act 1961 should also use ITR-4 for their tax filing.

There are certain categories of individuals and HUFs who are not allowed to opt for ITR-4. This includes individuals with a total income exceeding INR 50 lakh, those with carried forward losses from previous years, individuals with signing authority located outside India, investments in unlisted equity shares during the financial year, foreign assets or income, income from more than one house property, individuals serving as directors of a company, and non-residents or RNORs (Resident Not Ordinary Residents).

The ITR 5 form is intended for a wide range of entities and legal structures including Investment funds, Business trusts, Estate of insolvent, Estate of deceased, Artificial Juridical Person (AJP), Body of Individuals (BOIs), Associations of Persons (AOPs), Limited Liability Partnerships (LLPs), and firms. These entities should choose the ITR-5 form for their tax filing requirements.

The ITR-6 form is specifically designed for companies that are not claiming exemptions under Section 11 of the Income Tax Act. Companies falling under this category must choose the ITR-6 form for their tax filing. It is important to note that companies filing returns under Section 11 can only do so electronically.

The ITR-7 form is applicable to individuals and companies that have filed returns under specific sections of the Income Tax Act. Here are the details of the returns required for each section:

• Under Section 139(4A), individuals who receive income from a property belonging to a trust or other legal obligations, where the income is used solely for religious or charitable purposes, must file returns.

• For political parties with total income exceeding the maximum limit, returns must be filed under Section 139(4B).

• Entities such as scientific research associations, institutions falling under Section 10(23A), medical institutions, hospitals, universities, funds, educational institutions, news agencies, and institutions under Section 10(23B) must file returns under Section 139(4C).

• Colleges, universities, or other institutions that are not required to declare any income or loss must file returns under Section 139(4D).

• Business trusts not required to declare income or loss should file returns under Section 139(4E).

• Investment funds falling under Section 115UB, which are not required to declare any income or losses, must file returns under Section 139(4F).