What is an ITR?
Income Tax Return (ITR) is a form a person must submit to the Income Tax Department of India. The income tax return filing form contains information about a person's income and the annual taxes paid. The income tax return filing form information should relate to a particular financial year, i.e., starting on 1st April and ending on 31st March of the following year.
Income can take different forms, for example- Salary income, Profits & gains from business and profession, Income from real estate, Income from capital gains, Income from other sources such as dividends, interests, lotteries, etc.
The Income Tax Department(ITD) has prescribed seven types of ITR forms - ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7 and the applicability of the types of ITR forms depends on the nature of the income, the amount, and the one who is paying tax. In this blog article, we will discuss ITR filing and what are the various types of ITR forms available.
Importance of ITR filing or ITR file online
- If your gross annual income exceeds the exemption limit, then it is mandatory for the person to ITR file online. The limit for people below 60 years is Rs two and a half lakhs; for people between 60-80 years is RS 3 lakhs, and for those above 80, it is Rs 5 lakhs. Even if your income is below 2.5 lakhs, you can file an ITR file online to avail of various benefits. Here are specific points about the importance of ITR filing and why you should file an ITR file online.
- If you want to apply for a refund of income tax from the department.
- If you earned from or invested in foreign assets during the fiscal year.
- If you are looking to apply for a visa or loan.
- If the taxpayer is a company or firm, regardless of profit or loss.
You are also compulsorily liable to ITR file online even if your income is less than the basic exemption limit, but you fulfil one of the following conditions:
- They have deposited a total amount of more than 1,000,000 rupees in one or more current bank accounts, or have incurred aggregate expenditure of more than Rs 2,00,000 on foreign travel for themselves or any other person, or
- They incurred an aggregate expenditure of more than Rs.1 lakh on electricity.
- If the TDS/TCS exceeds Rs.25,000 in the previous year. In the case of senior citizens (above 60 years), this limit is Rs.50,000.
- In case you are an entrepreneur and your total sales, turnover, or gross income exceeded Rs.60 lakhs in the previous year.
- You are required for ITR filing if you are practicing a profession and your gross income is more than Rs 10 lakh during the previous year.
Types of ITR Forms
Here is a list of various types of ITR forms that a person should fill out based on other criteria mentioned below in detail.
ITR 1
This form is helpful for people whose income is from a salary or pension. In addition, if you have income from real estate or other sources, excluding lottery winnings or income from horse racing, you must file this ITR form. You cannot file this form if your annual income is more than INR 50 lakhs or if you own foreign assets. Further, the entry cannot show taxable capital gains, income from multiple properties, agricultural income above ₹5,000, or income from a profession or business.
ITR 2
If your per annum income is from house property, salary, pension, or other sources and exceeds INR 50 lakhs, you must use this form to file your IT return. If you combine the income of your spouse or children with your annual income, you have to fill out Form 2 with ₹1. However, you should not use this types of ITR form if your payment includes earnings from a profession or business.
ITR 3
Individuals who earn their living through profession or business are eligible to fill out Form 3. ITR Form 3 is also applicable if your income includes pension, salary, or other sources of income.
ITR 4
If you opt for the presumptive income regime under sections 44AD, 44ADA, or 44AE, you must file your tax return using Form 4. If your total annual turnover exceeds ₹ 2 million, you must file income tax using Form 3.
ITR 5
Form 5 is helpful for Limited Liability Companies (LLPs), Bodies of Individuals (BOIs), and Associations of Income Tax Filers (AOPs).
ITR 6
Companies not excluded under section 11, which guides earnings derived from property held for religious or charitable purposes, must file Form 6 electronically.
ITR 7
Individuals and firms who are required to file income tax returns under sections 139 (4A), 139 (4B), 139 (4C), and 139 (4D) must use Form 7. You can quickly fill your ITR form online, also known as electronic filing, which simplifies, speeds up, and eliminates the need for paper.
Types of income tax return filing forms
There are various types of income tax return filing forms available. Here are the three most important types of income tax return filing forms that anyone who is going for ITR filing should know.
Form 16
This is one of the most usual types of ITR form. An employee can obtain a Form 16 TDS certificate from the employer. HRA and LTA exemptions are also listed on Form 16. This types of ITR form contain information about an employee’s net taxable pay.
Form 26AS
Form 26AS contains TDS on different earnings such as wages, debt, sale of immovable property, etc. It also includes the details of self-assessment tax and advance tax paid by the person.
Form 15G and 15H
People below 60 years whose income is less than the exemption limit can file form 15G. In the case of a senior citizen, if the tax owed on net salary is 0, then form 15H should be filled.
Conclusion
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