How to choose your correct income tax return form – ITR

Many tax payers do not know which income tax return form they have to file with IT department for their income. In this article we will discuss various available income tax return forms for an individual and HUFs.

In short, Income tax return forms are also known as ITR. Choosing the right ITR form for your tax filling is crucial as the return may get rejected if you select a wrong form. Let us know the available ITR forms and for whom it’s applicable.

 

itr form

Income tax return form 1 – ITR1 (Sahaj)

Income tax return form 1 or ITR1 (Sahaj) has to be used only when you are getting salary or pension and/or you have rental income from one house and/or you have income from interest.

In following cases you should not use ITR1 (Sahaj);

  • Your exempted income during the year exceeds Rs. 5000
  • If you have any assets in a foreign country
  • You have Income from lottery and horse racing
  • You are claiming tax benefits under a foreign treaty
  • You have Losses under income from other sources

Income tax return form 2 – ITR2

ITR2 is applicable to individual and HUFs with income from salary or pension, rent from more than one house, capital gains, income from other sources including from lottery, winnings and race horses.

If an individual is not allowed to file ITR1 then he or she has to file ITR2. However, if the individual or HUF has income from business or profession then ITR2 is not allowed.

Income tax return form 3 – ITR3

ITR3 is applicable to partners in a firm. If you are a partner working in a partnership firm and getting following income then this is the ITR form you need to use while filling your IT return.

  • Interest, salary, bonus, commission or remuneration
  • Capital gains
  • Rent from one or more house or brought forward losses
  • Income from other sources including winning from lottery and income from race horses

If you have a sole proprietorship business then this ITR3 form is not applicable to you.

Income tax return form 4 – ITR4

ITR4 will be applicable only if you have a sole proprietorship business or you are a professional like doctor, lawyer, chartered accountant or getting commission. Income out of these business or profession should be filled up in ITR4 along with other incomes.

Income tax return form 4S – ITR4S (Sugam)

If your business turnover is less than 1 crore and you want to avail the benefits of presumptive taxation rules of IT act then you need to file ITR4S.

Under presumptive taxation rules, you are required to pay tax on basis of the percentage or amount that is fixed for different types of businesses.

However, ITR4S should not be used in following cases;

  • Self employed professional like chartered accountant, doctor, lawyer
  • You want to report your income less than 8% of the turnover.
  • You have made capital gains
  • Your income includes winning from lottery or horse races
  • You have income from speculative business
  • You earn from a profession referred to in section 44A(1) or income from agency businesses of income as commission or brokerage

ITR V – IT acknowledgement

If you are filling income tax return online then ITRV will be automatically generated after uploading your return. You are required to take a printout of ITRV and send a signed copy to CPC Bangalore office at below mentioned address by ordinary or speed post. Your return will not be considered as complete if ITRV has not reached CPC office.

Income tax department, CPC, Post Box No: 1, Electronic City Post Office, Bangalore – 560100, Karnataka

In case, the return has been filled with your digital signature then ITRV print out is not required to be sent to CPC Bangalore office.

We also have few more forms like ITR5, ITR6 and IT7 which are not applicable to an individual or HUF. We will discuss these ITR forms in our next article while discussing IT Return forms related to companies and other institutions.

Link to Download Forms and To Read Instructions

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