ITR Filing 2024: If you do not know which ITR form is right for you, then you can visit the Income Tax Department website to get information related to it or you can consult a tax advisor.
Income Tax Filing 2024 The last date for filing Income Tax Return (ITR) is approaching. It is very important to choose the right form while filing Income Tax Return (ITR). Choosing the right form makes it easier to file your income tax. In such a situation, it is important to know which ITR form is right for you. Filling the wrong form may cost you a fine.
Income Tax Department has issued a total of 7 ITR forms
The Income Tax Department issues different ITR forms for those earning different types of income. The Income Tax Department has issued a total of 7 ITR forms for the financial year 2023-24 (assessment year 2024-25). But do you know which of these forms you have to fill?
How to choose the right ITR form?
First of all, know that which form you have to fill depends on where your income comes from, what is your total income and which category you fall into – individual, Hindu Undivided Family (HUF), company etc. Here we are going to tell you about some common ITR forms…
Who can file ITR-1?
This form is for you if:
You live in India and receive salary or pension.
Your total annual income is less than ₹50 lakh.
You own a maximum of one house from which you earn income (with some exceptions).
You have income from interest, dividends or family pension (agricultural income limited to ₹5,000).
Who should not file ITR-1?
NRIs and Non-Resident Indians (RNOR): If you are not a citizen residing in India, you cannot use ITR-1 (Sahaj).
Earners above ₹50 lakh: If your annual income is more than ₹50 lakh, you will have to use ITR-2 or other ITR forms instead of ITR-1 (Sahaj).
Earners from business or profession: If you earn income from business or profession, you will have to use ITR-3 or other ITR forms instead of ITR-1 (Sahaj).
Agricultural income above ₹5,000: If your agricultural income is more than ₹5,000, you will have to use ITR-4 or other ITR forms instead of ITR-1 (Sahaj).
Those with income from capital gains (short term or long term): If you have made capital gains, you will have to use ITR-2 or other ITR form instead of ITR-1 (Sahaj).
Investors in unlisted equity shares: If you have invested in unlisted equity shares, you will have to use ITR-2 or other ITR form instead of ITR-1 (Sahaj).
Director of a company: If you are a director of a company, you will have to use ITR-2 or other ITR form instead of ITR-1 (Sahaj).
Those claiming tax deduction under section 194N of the Income Tax Act: If you claim tax deduction under section 194N, you will have to use ITR-2 or other ITR form instead of ITR-1 (Sahaj).
Deferred income tax on ESOP from eligible startup: If you have to pay deferred income tax on ESOP from eligible startup, you will have to use ITR-2 or other ITR form instead of ITR-1 (Sahaj).
Who can file ITR-2?
Compared to ITR-1, ITR-2 form is applicable to more types of taxpayers. It includes most of the individual taxpayers and families in the individual and Hindu Undivided Family (HUF) category. ITR-2 is suitable for those whose income comes from different sources. The incomes included in these are as follows:
Salary/Pensioner: If you receive regular salary or pension, fill ITR-2.
Homeowner: If you own one or more houses from which you get income, fill ITR-2.
Investor: If you have made capital gains (short term or long term) by selling investments or properties, fill ITR-2.
Income from other sources: If you receive income from lottery, horse racing, legal gambling (including agricultural income over ₹5,000) or from abroad, fill ITR-2.
NRIs can also fill ITR-2 form with certain conditions
At the same time, under certain conditions, Non-Resident Indians (NRIs) can also fill ITR-2. However, ITR-2 does not apply to those whose income is from a business or profession such as sole proprietorship, partnership etc. If you earn income from business or profession, you will have to fill a different ITR form instead of ITR-2.
There is no fixed income limit for filling ITR-2. But, generally it is suitable for those whose income structure is complicated by ITR-1.
Who can fill ITR-4?
ITR-4 form is specifically designed for taxpayers whose income comes from multiple sources. These include Individuals, Hindu Undivided Families (HUFs), Partnership firms (excluding Joint Liability Firms or LLPs):
ITR-4 is suitable for people whose income comes from the following sources: This form is specifically applicable for people whose income is computed on the basis of income presumption schemes prescribed under section 44AD, 44ADA or 44AE of the Income Tax Act. These schemes are for small businesses and professionals whose turnover is below a certain limit. Income from regular salary or pension can also be shown in ITR-4. You can include income from a maximum of one house in ITR-4. Other income like interest on savings accounts, deposits or tax refunds can be reported with certain restrictions (except income from lottery and horse race winnings).
Turnover limit for filing ITR-4
The key condition for filing ITR-4 is that if your business is not eligible for the prescribed income estimation schemes or you maintain regular bookkeeping, then ITR-4 may not be suitable for you. There are turnover limits for filing ITR-4, so make sure that your business meets these limits so that you are eligible to file under this scheme.
Additional ITR forms available for companies and special circumstances
Apart from this, additional ITR forms are available for companies and special circumstances, but the forms mentioned above are the most commonly used for individual taxpayers. If you are still not clear about which ITR form is right for you, then you can get information related to it by visiting the Income Tax Department website or consult a tax advisor.
