Income Tax Return (ITR) Filing 2024: Which ITR Form Should You File?

Last Date For ITR Filing 2024

Income tax return (ITR) filing for FY 2023-24 ends on July 31, 2024. Avoid penalties; file on time! A penalty of ₹5,000 for income above ₹5L and ₹1,000 for less.

Filing Income Tax Returns (ITR) is a fundamental obligation for every taxpayer to comply with their country’s tax laws. The Income Tax Return forms, commonly known as ITR forms, are designed to capture various types of income and cater to different categories of taxpayers. Each form serves a specific purpose and applies to individuals and entities based on income sources and financial activities. In this article, we will delve deeper into the details of each ITR form and identify who should file them.

Types of ITR Forms

1. ITR-1 (Sahaj)

Who Should File ITR-1?

ITR-1, known as Sahaj, is the simplest and most widely used form. Individuals with income from the following sources can file ITR-1:

1. Income from Salaries/Pensions: Salaried employees and pensioners can use ITR-1 to report their income, allowances, and any deductions claimed under Section 16.
2. Income from One House Property: If you own a single-house property and earn rental income from it, ITR-1 is applicable.
3. Other Sources: This form can be used if you have income from interest on savings accounts, fixed deposits, or other sources not exceeding Rs. 10,000.

Who Cannot File ITR-1?

Certain individuals are not eligible to file ITR-1 and should opt for other ITR forms if their income falls under any of the following categories:

1. Total Income Exceeding Rs. 50 Lakhs: If your total income for the financial year exceeds Rs. 50 lakhs, you cannot use ITR-1.
2. Income from More Than One House Property: Individuals with income from multiple house properties cannot use ITR-1; they should opt for ITR-2.
3. Income from Capital Gains: If you have earned capital gains from selling assets like stocks, property, or other investments, ITR-1 is unsuitable.

2. ITR-2

Who Should File ITR-2?

ITR-2 applies to individuals and Hindu Undivided Families (HUFs) who have income from various sources other than business or profession. Taxpayers with income falling under the following categories should file ITR-2:

1. Income from Salary/Pensions: Like ITR-1, ITR-2 can be used for reporting income from salaries or pensions.
2. Income from More Than One House Property: Individuals with income from more than one house can file ITR-2.
3. Income from Capital Gains: Taxpayers with income from capital gains, whether short-term or long-term, should use ITR-2 to report such gains.
4. Foreign Assets and Income: If you have foreign assets or earned income from outside the country, ITR-2 is the appropriate form.

Who Cannot File ITR-2?

Individuals who fall under the following categories are not eligible to file ITR-2 and should explore other ITR forms that align with their income sources:

1. Business Income: If you have income from a proprietary business or are a partner in a partnership firm, ITR-2 is not suitable.
2. Presumptive Income: Taxpayers benefit from presumptive taxation under Section 44AD, Section 44ADA, or Section 44AE and cannot use ITR-2.

3. ITR-3

Who Should File ITR-3?

ITR-3 is specifically designed for individuals and HUFs who are partners in a partnership firm or have income from a proprietary business. Taxpayers falling under the following categories should file ITR-3:

1. Partners in a Partnership Firm: If you are a partner in a partnership firm, you should use ITR-3 to report your share of income from the firm.
2. Income from Proprietary Business: Individuals with income from a sole proprietorship should also opt for ITR-3 for tax filing.

Who Cannot File ITR-3?

Individuals who do not have income from a partnership firm or proprietary business should not file ITR-3. They should explore other ITR forms based on their income sources.

4. ITR-4 (Sugam)

Who Should File ITR-4?

ITR-4, also known as Sugam, is tailored for individuals, HUFs, and firms (other than LLP) with presumptive income from business and profession. Taxpayers who fall under the following criteria should file ITR-4:

1. Presumptive Income: If you have opted for the presumptive taxation scheme under Section 44AD or Section 44AE, ITR-4 is the appropriate form.
2. Income from Profession: Individuals in specified professions eligible under Section 44ADA can use ITR-4.
3. Income from Business: Small businesses with a total turnover of up to Rs. 2 crores can file ITR-4.

Who Cannot File ITR-4?

Taxpayers who do not meet the above criteria for presumptive income or have income from sources other than business or profession should not use ITR-4.

5. ITR-5

Who Should File ITR-5?

ITR-5 is meant for entities like Limited Liability Partnerships (LLPs), Association of Persons (AOPs), Body of Individuals (BOIs), and other artificial juridical persons. Taxpayers falling under the following categories should file ITR-5:

1. LLPs: All LLPs, irrespective of their income sources, should file ITR-5.
2. AOPs and BOIs: Associations of Persons (AOPs) and Body of Individuals (BOIs) should also use ITR-5 for tax filing.
3. Artificial Juridical Persons: Any other artificial juridical person that does not come under the definition of an individual, HUF, company, or partnership firm should file ITR-5.

Who Cannot File ITR-5?

ITR-5 does not apply to companies. If you are operating as a company, you should explore other ITR forms suitable for companies.

6. ITR-6

Who Should File ITR-6?

ITR-6 is exclusively for companies that do not claim tax exemption under Section 11 of the Income Tax Act. Companies meeting the following criteria should file ITR-6:

1. Non-Exempt Companies: Companies that do not fall under the purview of Section 11, which deals with a tax exemption for income derived from property held for charitable or religious purposes.

Who Cannot File ITR-6?

Companies claiming tax exemption under Section 11 should not file ITR-6 and should explore other appropriate ITR forms.

7. ITR-7

Who Should File ITR-7?

ITR-7 is for individuals, HUFs, companies, and other entities who must file their income tax returns under specific sections of the Income Tax Act. Taxpayers falling under the following categories should file ITR-7:

1. Trusts and Charitable Institutions: Trusts and institutions registered under Section 12A or Section 12AA should file ITR-7.
2. Political Parties: Political parties required to furnish their income details under Section 139(4B) should use ITR-7.
3. Universities and Colleges: Educational institutions, universities, and colleges that are required to file returns under Section 139(4C) should file ITR-7.
4. Medical and Educational Institutions: Entities with income from medical and educational activities and must file returns under Section 139(4D) should use ITR-7.

Who Cannot File ITR-7?

Entities not falling under the above categories specified in the Income Tax Act should not file ITR-7 and should explore other ITR forms based on their income sources.

Conclusion

Understanding the types of ITR forms is crucial for taxpayers to ensure accurate and timely filing of their income tax returns. Each form caters to specific income sources and financial activities, making it essential to choose the appropriate form that aligns with the individual or entity’s circumstances. Filing the correct ITR form not only fulfils the tax compliance requirements but also helps taxpayers make the most of their deductions and exemptions.

Kanakkupillai offers seamless ITR filing services. File your income tax return with ease and accuracy. Avoid penalties and ensure compliance. Get started now!

FAQs

1. What is the deadline for filing ITR?

The deadline for filing ITR is usually July 31st of each year. However, it is advisable to check for any updates or extensions provided by the tax authorities.

2. Can I file ITR offline?

Yes, taxpayers can file ITR offline by submitting a physical copy of the filled-in form at the designated income tax office. However, e-filing through the official website is the preferred and more convenient method.

3. Can I revise my ITR after filing?

Yes, if you realize any errors or omissions in your originally filed ITR, you can file a revised return using the online portal. However, this option is available within a specified timeframe.

4. Do I need to keep any documents as proof while filing ITR?

Yes, it is essential to maintain proper documentation to support the income, deductions, and exemptions claimed while filing ITR. The tax department may ask for these documents during an assessment.

5. What happens if I miss the deadline for filing ITR?

Failing to file ITR by the deadline may attract penalties and interest on the tax amount due. It is best to file the return immediately to avoid any adverse consequences.