Introduction

We have all heard many times to file the Income Tax Return on time. There are many types of income tax return forms. Which one to file and when to file? This article reveals all about Income tax and Income Tax Returns.

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Income tax is the direct taxable amount paid on the annual income of the individual or a business entity. An income tax return (ITR) form is filled by an individual or by a business entity in order to declare his income. These ITR forms include many types of forms like – ITR 1, ITR 2, ITR 3 etc. which are filled according to its entity type and nature of income earned

INCOME TAX RETURN or ITR

Income Tax Return (ITR) is a medium through which taxpayers submit information about their income earned. It also contains applicable tax towards their income. This returns is filled in prescribed forms – ITR forms. There are in total 7 such forms namely - ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7. These returns are to be filled every year at the end of the financial year on or before the specified due date.

The applicability of ITR forms depends - the source of income of the taxpayer, the amount of income earned in that financial year and the category the type of entity e.g. individuals, HUF, company, etc.

BENEFITS -

• Maintains transparency by income disclosure
• Required for loan disbursement
• Helps in the calculation of net worth of a person
• Helps in getting refund of tax paid from the government
• Important in getting a credit card
• Required for Visa application

TYPES of ITR FORMS -

There are various types of ITR Forms categorized on the nature of the person and nature of income -

ITR-1 or SAHAJ

Applicable on -

• Individual Assesse having an income up to INR 50 Lacs
• Nature of Income i.e. from Salary or pension,
• Income from house property only one
• Other sources of income such as interest income.

Non-Applicable on -

• Individual Assesse having income above INR 50 lacs
• Unlisted shareholder
• Director of company
• Income from outside India or having assets located outside India
• If there is any income from business or profession or from capital gains
• If there is any income from more than one house property
• Any income from the lottery
• If the agriculture income is exceeding INR 5000.
• Having loss from house property or relief under section 90 /91

ITR 2

Applicable on -

• An individual having income exceeding INR 50 lac
• Director of a company
• Having the company’s unlisted shares
• Income from outside income
• Income from house property in case there is more than one house
• Income from salary/ pension
• Income from capital gains

Non Applicable on

• If there is any income from business or profession or from capital gains

ITR 3

Applicable on

• Applicable to HUF and to all individuals
• If there is any income from business or profession or from capital gains
• Individuals who are not eligible to file ITR 1, ITR 2, and ITR 4
• Individual Director in a company
• Investments in unlisted equity shares
• If there is any income as a partner in the firm

ITR 4 or Sugam

Applicable on -

• Applicable for Individual, HUF, and Partnership
• Having income up to 50 lakh
• The income included in ITR 1
• Income earned under section 44AD, 44AE,44ADA on presumptive tax scheme.

Non Applicable on -

• LLP having income up to 50 lakh
• Being a director of company
• Holder of unlisted shares
• Having any asset located outside India
• Income from outside India
• Having signing authority account located outside India
• Income from brokerage, commission, etc.

ITR 5

Applicable on -

• Applicable on all Society, firm, LLP and partnership
• Association of Person (AOP)/ Body of Individuals (BOI)
• Artificial Judicial Person (AJP)

ITR 6

Applicable on -

• On all the companies that are not claiming any exemptions under section 11 i.e. any income earned from property which was kept for charitable or religious purposes of the Income Tax Act

ITR 7

Applicable on -

Applicable to all the individuals and companies who file returns under-

• section 139(4A) - income from a property belonging to a trust and used for religious or charitable purposes
• section 139(4B) - filed by political party in case the income generated is more than the maximum amount
• section 139(4C) - filed by scientific association, institutions or association under Section 10(23A), medical institutions
• Section 139(4D) - filed by education institution
• section 139(4E) - Business trusts which are exempted from furnishing income or loss
• Section 139(4F) - Investment funds presented under Section 115UB
• Have exemption under clauses of section 10 of Income Tax Act.

Conclusion

Timely filing of the Income Tax not only provides the multiple benefits but also helps in promoting the growth of the country. The amount collected through the paid tax is utilised for the growth of country.

ITR can be filled by filing the various forms depending upon the nature of the income collected. The whole process of ITR filing is fully online. Individuals can file ITR through various forms depending on their source of income through the official website of the Income Tax Department – (ITR Returns). These forms are in PDF format and can be electronically filed.

The filing of the ITR is quite easy but it is advisable take the help of expert so that ITR can be filled within due date. This way penalties can be avoided. For any query, feel free to contact Corpseed.