A brief introduction to ITR Forms and applicability on which form to choose

Income Tax Return is a form, or a declaration given by the taxpayer assessee regarding the overall annual income and taxes paid by them during the relevant financial year. ITR forms utilities are released by the income tax department before the due date filing periods of income tax returns.

Applicability of ITR forms depend upon various factors like limits of income, category of persons or sources of income etc. There are 7 notified forms provided by income tax department which are ITR 1 to ITR 7.

ITR Forms and their applicability:

ITR 1:
ITR-1 known as SAHAJ Form can be filed by a Resident Individual whose:

• Total income does not exceed ₹ 50 lakh during the FY
• Income is from salary, one house property, family pension income, agricultural income (up to ₹5000/-), and other sources, which include:
•  Interest from Savings Accounts
• Interest from Deposits (Bank / Post Office / Cooperative Society)
• Interest from Income Tax Refund
• Interest received on Enhanced Compensation
• Any other Interest Income
• Family Pension
• Income of Spouse (other than those covered under Portuguese Civil Code) or Minor is clubbed (only if the source of income is within the specified limits as mentioned above).

ITR 2:
ITR-2 can be filed by individuals or HUFs who:

• Are ineligible to file ITR 1
• Earns income from Capital Gains
• Owns more than one house property
• Holds foreign assets or earns foreign income
• Income from virtual digital assets like crypto
• Are directors in a company or holds unlisted equity shares
• Total income exceeds ₹ 50 lakh during the FY
• Do not have income from profit and gains of business or profession and also do not have income from profits and gains of business or profession in the nature of:

Interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from a partnership firm

ITR 3:
ITR-3 can be filed by those who:

• Earns all the incomes mentioned in ITR 2
• Earns income from Business/Profession
• Is a partner in a partnership firm. Similarly, an Individual or HUF who is earning income as a partner of a partnership firm which is engaged in a business/profession is not eligible to file ITR-3. In this case, he is required to file ITR 2.
• Does not declare income on presumptive basis
• Earns income from house property

ITR 4:
ITR-4 SUGAM can be filed by a Resident Individual / HUF / Firm (other than LLP) who has:

• Income not exceeding ₹50 Lakh during the FY
• Income from Business and Profession which is computed on a presumptive basis u/s 44AD, 44ADA or 44AE
• Income from Salary/Pension, one House Property, Agricultural Income (up to ₹ 5000/-)
• Other Sources which include (excluding winning from Lottery and Income from Race Horses) saving bank interest, Term deposit interest, interest from IT refund, family pension, any other income
• No directorship in a company
• Does not have income of the following nature:

winnings from lottery, activity of owning and maintaining race horses, income taxable at special rates u/s 115BBDA or Section 115BBE.

Under ITR 3 you can opt for old tax regime if you have business income but for opting old Tax regime filing Form 10 IEA before filing the ITR is necessary.

ITR 5:
ITR 5 can be filed by following persons:

• Firms
• LLPs
• Association of Persons
• Body of Individuals
• Artificial Juridical person
• Local Authority
• Co-operative society
• Trust other than Trusts eligible to file Form ITR-7
• Business Trust or investment fund
• Estate of an insolvent
• Estate of deceased person
• Society registered under Societies Registration Act, 1860 or under any other law of any State
• Representative Assessee
• However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4D) shall not use this form.

In ITR 5 Form Financial Statements are also to be filed.

Due Dates for Filing ITR-5 Form –

1. When accounts are required to be audited under the Income Tax Act:

31 October of the assessment year

• When report in Form No. 3CEB is to be furnished:

30 November of the assessment year

• In other cases (where accounts need not be audited):

31 July of the assessment year

ITR 6:
ITR 6 is the Income Tax Return filing form specifically meant for Companies other than companies claiming exemption under section 11 must furnish their income tax return in ITR-6 Form. Companies claiming exemption under section 11 are those whose income from property is held for charitable or religious purposes. All companies which are registered under the Companies Act 2013 or Companies Act 1956 are required to file ITR 6 Form. However, if the company earns income from the property held for religious or charitable purposes, then it is not required to file the ITR 6 Form.

ITR 7:
ITR-7 Form can be used by persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D). The category of persons whose income is unconditionally exempt under various clauses of section 10, and who are not mandatorily required to furnish their return of income under the provisions of section 139, may use relevant ITR form for filing return.

From A.Y.2022-23 onwards ITR 7 will not be applicable to the persons whose income is unconditionally exempt. No document (including TDS certificate) should be attached with this return form while filing ITR-7.

Due date for filing ITR 7

• For taxpayers who are not required to get their accounts audited:

31^st July of the assessment year.

• For taxpayers who are required to get their accounts audited (including companies): 

30^th September of the assessment year.

Conclusion:
Income tax return filing is the mandatory procedure to be done by eligible assessees according to the applicable due dates. Selecting the ITR forms depends on various factors like source of income, amount of income or type of persons.