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Income Tax Return (ITR) Forms: A Comprehensive Guide to Types, Filing Procedures, and More

Updated: Nov 30, 2023

Income Tax Return (ITR) forms are the official forms used by taxpayers to provide information about their earned income and corresponding tax obligations to the income tax department. The department has an array of seven different types of ITR forms.


It is crucial for every taxpayer to familiarize themselves with the details of these ITR forms and ensure timely filing before the designated due date to avoid any potential penalties.


The selection of the appropriate ITR form depends on factors such as the amount of income earned, the sources of income, and the taxpayer's category, including individuals, HUF (Hindu Undivided Family), and companies.



Late Filing Income Tax Return Fee Details

e-Filing Date​

Total income below Rs 5 lakh

Total income above Rs 5 lakh

31st July 2022

Rs 0

Rs 0

Between 1st August 2022 to 31st March 2023

Rs 1,000

Rs 5,000


Conditions Requiring Mandatory Income Tax Return (ITR) Filing


To determine if you are required to file an income tax return, consider your gross annual income in relation to the specified basic exemption limits.


For individuals below 60 years of age, the threshold is set at Rs 2.5 lakh. If you fall in the age bracket of 60 years or above but below 80 years, the limit increases to Rs 3.0 lakh. For individuals aged 80 years or above, the exemption limit is set at Rs 5.0 lakh. It is essential to assess your income against these thresholds to determine your tax filing obligations.


  1. In the event that your income is derived from multiple sources, including capital gains or property rental,

  2. If you are seeking to claim a refund from the income tax department,

  3. If you have investments in or income from foreign assets during the financial year,

  4. It becomes crucial for you to follow through with ITR filing if you plan to apply for a visa or a loan.

  5. If you are a company or a firm, regardless of whether you have made a profit or incurred a loss.


By following these steps, you can easily navigate the e-filing website and access the necessary services provided by the Income Tax Department.


Step 1: Begin by visiting the official e-filing website of the Income Tax Department.


Step 2:

If you are already registered on the portal, simply click on the 'Login Here' option. If you are new to the portal, select 'Register Yourself' to create an account.


Step 3: Choose the appropriate 'User Type' from the provided options, such as Individual, Hindu Undivided Family (HUF), Chartered Accountants, and more. Fill in your current and permanent address details, complete the Captcha code, and click 'Submit'.


Step 4: The system will verify your PAN number, and upon successful verification, your transaction ID will be displayed.


Step 5: Finally, activate your Income Tax Department account by following the instructions sent to your registered email ID.



When filing your Income Tax Return (ITR), it is crucial to be mindful of the different types of ITR available. Firstly, make sure to link your Aadhaar with your PAN card and pre-validate the bank account where you wish to receive any tax refunds.


Secondly, it is vital to select the appropriate type of ITR that aligns with your specific tax situation. Filing an incorrect ITR can result in your return being deemed defective. Additionally, don't forget to verify your return by opting for e-Verification, which ensures the authenticity and validity of your filed return. Lastly, ensure that you file your return within the defined timelines to avoid any penalties or complications.


Let us discern the characteristics of different types of ITR forms:


ITR-1:

The ITR-1 form is widely used for filing income tax returns and is particularly popular among individuals. This form is specifically designed for resident individuals whose total income does not exceed Rs 50 lakh. It covers income from various sources including salaries, income from single-house property, and other interests earned from savings accounts, deposits (such as those in banks, post offices, or cooperative societies), income tax refunds, enhanced compensation, and any other interest income. Additionally, it also takes into account agricultural income of up to Rs 5,000 and family pension.



itr 1 form

To comprehend the applicable categories for ITR-1, let's decipher what does not apply.

  1. ITR-1 is not suitable for individuals engaged in consultancy services. Consultancy income differs from salary income, which is established through an employer-employee relationship. When receiving retainer ship fees for consultancy services, including income as a director of a company, resident individuals cannot use ITR-1 for filing their income tax returns.

  2. The era of remote work has swiftly emerged, offering flexibility and expansive opportunities for resident individuals in India to work with overseas companies, projects, and campaigns. It's important to note that if any income is earned from outside India, taxpayers should file their income tax return using ITR-2 or ITR-3, not ITR-1.

  3. Another scenario that does not apply to ITR-1 involves holding shares (including financial interest) in foreign companies as a lucrative long-term investment. In such cases, resident individuals are required to declare information about assets located outside India, which cannot be done in ITR-1. This declaration must be filed using ITR-2 or ITR-3.

  4. Income generated from the sale of shares or any other capital asset falls under "income under the head capital gain." ITR-1 does not include a requirement to declare such income. While holding listed shares does not necessitate a separate declaration and permits the use of ITR-1, if such shares or other capital assets (movable or immovable) are sold during the year, the taxpayer must file their tax return using ITR-2 or ITR-3.

  5. When holding unlisted equity shares, a different scenario arises, particularly in start-ups where employees receive shares through Employee Stock Ownership Plans (ESOPs). Since these shares are not publicly listed, the tax department provides an additional section for reporting details of unlisted shares, which is unavailable in ITR-1. Therefore, individuals holding unlisted equity shares should file their income tax return using ITR-2 or ITR-3, as holding such shares involves personal investment.


ITR-2:

The ITR-2 form was designed for individuals and Hindu Undivided Families (HUF) who receive income apart from their earnings derived from 'Profits and Gains from profession or business.' This form is specifically for individuals who have income generated from the sale of properties or assets and those who earn income from foreign sources.


Moreover, if you hold the position of a director in any company and have made investments in unlisted equity shares of a company, it is mandatory to file your tax returns using ITR-2.



Income Tax Return 2 form

Individuals meeting the following income criteria are eligible to file Form ITR-2:

  1. Earnings from employment or pension

  2. Profits or losses from the sale of investments or properties, whether short-term or long-term

  3. Income derived from multiple house properties

  4. Miscellaneous income sources, including winnings from gambling activities such as horse racing and lotteries, as well as other lawful forms of gambling

  5. Agricultural income exceeding Rs 5,000

  6. Individuals classified as a resident but not ordinarily resident or non-resident

  7. Income obtained from foreign sources

However, entrepreneurs or Hindu Undivided Families (HUF) generating income from business or professional activities are not required to fill out Form ITR-2.


ITR-3:

The ITR-3 form serves as a tax return document meticulously crafted for individuals or Hindu Undivided Families (HUF) whose primary source of income emanates from the realm of "profits or gains of business or profession." This particular form exudes a distinctive elegance and becomes the prudent choice for filing tax returns when these individuals or HUFs find themselves not meeting the eligibility criteria for the utilization of Form ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam).


itr 3 form

To make use of ITR Form 3, taxpayers must meet certain discernible conditions, including:

  1. Holding the position of a director in a company or engaging in a business venture, indicates a level of entrepreneurial involvement.

  2. Possessing a residential status classified as either a resident or non-resident of India, acknowledging the varied tax implications for different residential statuses.

  3. Receiving income from a pension, implying a supplementary income source beyond active business activities.

  4. Earning income from house property, indicating property ownership or rental income that contributes to their overall financial portfolio.

  5. Having investments in unlisted equity shares, showcasing a diversified investment strategy and potentially involving higher risk and return opportunities.

  6. Falling under the taxable category of 'profits and gains of business or profession,' which encompasses a broader spectrum of income sources, including salary, interest, commission, bonus, or remuneration earned through professional pursuits.


The completion of the ITR-3 Income Tax Return Form can be accomplished through three distinct methods:

  1. Electronically filing the return with a digital signature, which is mandatory for assessors who are subject to a tax audit. This method ensures a secure and authenticated submission of the tax return.

  2. Electronically submitting the required information in the ITR-3 form along with a digital verification code. This method offers a convenient and streamlined approach for validating the accuracy and authenticity of the submitted tax return.

  3. Electronically transmitting the data in the ITR-3 form and subsequently dispatching the ITR-V form, serving as a verification of the tax return, to the designated income tax office. Taxpayers opting for this method must duly complete the ITR-V acknowledgement, ensuring compliance with the verification process.


ITR-4:

ITR-4 got particularly designed for resident individuals, Hindu Undivided Families (HUF), and firms (excluding LLP) who satisfy the following criteria:


• The total income earned during the Financial Year does not exceed ₹50 Lakh.

• The income derived from Business and Profession is computed on a presumptive basis under sections 44AD, 44ADA, or 44AE of the Income Tax Act.

• The income is generated from various sources, including Salary or Pension, a single House Property, Agricultural Income (up to ₹5000/-), and other miscellaneous sources.

• Additional income sources covered by ITR-4 include Interest from Savings Accounts, Interest from Deposits (Post Office, Bank, or Cooperative Society), Interest from Income Tax Refund or Family Pension, as well as interest received on enhanced compensation or any other interest income.


However, it is important to note that certain income sources, such as winnings from Lotteries and Income from Race Horses, are not considered eligible for inclusion under ITR-4.


Resident individuals, Hindu Undivided Families (HUF), and firms (excluding Limited Liability Partnerships) are ineligible to file ITR-4 under the following circumstances: if they are classified as Resident Not Ordinarily Resident (RNOR) or non-resident Indians (NRIs) if their total income exceeds ₹50 lakhs if their agricultural income exceeds ₹5,000 if they hold the position of a director in a company if they earn income from multiple house properties or sources such as lottery winnings, race horses, or income taxable at special rates under Section 115BBDA or Section 115BBE if they possess unlisted equity shares at any point during the previous year if they have deferred income tax on Employee Stock Option Plans (ESOP) received from an eligible start-up employer, or if they fail to meet the eligibility criteria specified for filing ITR-4.


itr 4 form

To successfully file ITR-4, it is essential to gather and organize the following documents as per their applicability:

  1. Form 16, which provides details of income earned through salary or wages.

  2. Form 26AS and AIS, offer a comprehensive summary of taxes paid and tax credits received.

  3. Form 16A, which is necessary for reporting income from sources other than salary, such as interest or dividends.

  4. Bank statements, provide a record of financial transactions and income earned from interest or investments.

  5. Housing loan interest certificates are crucial for reporting deductions on home loan interest payments.

  6. Donation receipts, serve as evidence for claiming deductions on charitable donations.

  7. Rental agreement, in case rental income, needs to be reported.

  8. Rent receipts, serving as proof of rent paid for claiming deductions.

  9. Investment premium payment receipts, including policies such as LIC, ULIP, etc., are important for reporting investments made and availing relevant deductions.


ITR-5:


The ITR 5 Form caters to a wide range of entities, including Firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Body of Individuals (BOIs), Artificial Juridical Persons, Cooperative societies, and Local Authorities (Loc). It got designed to meet the reporting requirements of these diverse entities, as long as they are not mandated to file their income tax returns under sections namely 139(4A), 139(4B), 139(4C), or 139(4D). These sections encompass various entities such as Trusts, Political parties, Institutions, and Colleges, among others.

itr 5 form


The form has been divided into two distinct sections and thirty-one schedules. The Income Tax Department has provided taxpayers with a prescribed sequence to follow when completing their income tax returns. This sequence entails initiating the process with Part A, then navigating through the Schedules section, proceeding to Part B and Part C. Finally, taxpayers are required to complete the Verification section, ensuring the accuracy and authenticity of all the information provided in the return.


ITR-6:


The filing of the ITR 6 Form is obligatory for all companies duly registered under either the Companies Act 2013 or its predecessor, the Companies Act 1956. However, companies whose source of income is derived from properties held for religious or charitable purposes are exempted from filing the ITR 6 Form.

itr 6 form

In addition, if the assessee is liable for an audit under section 44AB and their accounts have been audited by a certified accountant, they must provide the necessary details of the audit report. This includes information about the auditor, along with the date of electronic submission of the report to the tax department. Ensuring compliance with the e-filing requirements for audit reports is an important aspect of fulfilling the obligations under the Income Tax Act.


ITR 7 is the last amongst the types of ITR forms:


The ITR-7 Form has gotten dedicated to individuals who meet specific criteria outlined in various sections of the Income Tax Act. These criteria encompass various entities and individuals who have specific income sources or obligations as defined in the sections of the Act. For instance, Section 139(4A) mandates individuals receiving income from property held under trust or legal obligations, wholly or partially for charitable or religious purposes, to file the ITR-7 Form. Similarly, political parties are required to file the ITR-7 Form under Section 139(4B) if their total income exceeds the maximum amount exempt from income tax, without considering the provisions of Section 139A.

itr 7 form

Scientific research associations, news agencies, associations or institutions mentioned in section 10(23A), institutions referred to in section 10(23B), funds, universities, educational institutions, and medical institutions must file the ITR-7 Form as per Section 139(4C). Additionally, universities, colleges, or other institutions not required to file a return of income or loss under any other provision must use the ITR-7 Form under Section 139(4D). Business trusts that are not obligated to furnish a return of income or loss under any other provisions are required to file the ITR-7 Form under Section 139(4E). Investment funds referred to in section 115UB also utilize the ITR-7 Form as per Section 139(4F), and they are not required to file a return of income or loss under any other provisions.


FAQs:

Q1 Is there any distinction between the ITR-2 and ITR-2A forms?

The ITR-2 form is more comprehensive and intricate compared to the ITR-2A form. Individuals eligible to use the ITR-2A form have the alternative option to utilize the ITR-2 form. However, it is important to note that the ITR-2A form does not include reporting of income derived from Capital Gains. Hence, this distinction should be considered when selecting the appropriate form for filing income tax returns.


Q2 Besides choosing the right ITR form from amongst the various types of ITR, do I need to pay additional Tax Deductions at Source (TDS) if my salary is already subject to TDS when filing an Income Tax Return (ITR)?

Unlike income tax, which is levied based on the slab rates proposed by the Finance Minister, TDS is proportional to the payment and lacks flexibility. If your salary is already subject to TDS, you do not need to pay additional TDS when filing your ITR. The TDS amount deducted from your salary acts as an advance tax payment on your behalf, which is adjusted against your final tax liability.


Q3 Can I make modifications or corrections to the ITR form after it has been submitted? What options are available to rectify errors or inaccuracies in the filed ITR?

If you have filled out the ITR form incorrectly or made errors, you can rectify them by filing a revised return through the e-filing portal. The option to revise your ITR allows you to rectify mistakes and provide accurate information. In cases where the TDS amount is lower than anticipated, you may be required to pay the remaining tax liability. Conversely, if the TDS amount exceeds expectations, you may be eligible for a refund of the excess tax paid.


Q4 Is a PAN card (Permanent Account Number) mandatory for filing an ITR? Can I submit the ITR without a PAN card?

A PAN card is a mandatory document required for filing an income tax return. It serves as a unique identification number for taxpayers and ensures proper tracking and verification of tax-related transactions. Hence, it is not possible to submit an ITR without a PAN card. It is crucial to obtain a PAN card before initiating the ITR.



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24 eFiling
24 eFiling
Jun 16, 2023

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