Income Tax Returns or Forms (ITR)

An Income Tax Return (ITR) is a form through which the details of income earned by a person in a financial year, and taxes paid on such income are communicated to the Income Tax Department.

Depending on the nature and status of income, different ITR forms are prescribed for different classes of taxpayers.^{(( Rule 12, Income Tax Rules, 1962))} Every taxpayer has to file tax returns under one specific ITR form only, and you have to choose the ITR form applicable to you. Filing the wrong ITR form will be considered as incorrect and defective.

Income Tax Forms

ITR forms can be downloaded on the Income Tax Department website. You will receive an Acknowledgement Form from the Income Tax Department when the data of the Return of Income in Forms ITR-1 (SAHAJ), ITR-2, ITR-3, ITR4 (SUGAM), ITR-5, ITR-6, ITR-7, is both filed and verified.

ITR-1 (SAHAJ)

Individuals residing in India having a total income of up to 50 lakh have to file this ITR Form. You are a resident if you have lived^{(( Section 6, Income Tax Act, 1961))}:

• in India for at least 182 days in the previous year
• in India for at least 365 days in the four years before the previous year, and in India for at least sixty days in the previous year

You have to fill this form when the source of the income is from your:

• Salary or pension
• One house property
• Other sources like interest etc. (not including lottery winnings, income from race horses etc.)
• Agricultural income up to Rs 5,000

If you are a person who is not residing in India, or a director in a company,^{(( ITR-1, Income Tax Department website, available at https://www.incometaxindia.gov.in/forms/income-tax%20rules/2020/itr1_english.pdf))} or a person who has income from any source outside India, the ITR-1 form is not applicable.

ITR-2

This form is applicable to:

• An individual to whom ITR-1 does not apply, or
• A Hindu Undivided Family (HUF) whose total income does not include profits and gains of a business or profession.^{(( Rule 12(1)(c), Income Tax Rules, 1962))}

For example, if Rama is a director in a company, then she will have to file tax returns under ITR-2, because she is not covered under ITR-1. Further, you have to fill this form when the source of the income is from your:

• Capital gains
• More than one house property
• Foreign income/foreign assets

ITR-3

This form is only applicable to:

• An individual or a Hindu Undivided Family (HUF) to whom forms ITR-1, ITR-2, and ITR-4 are not applicable, and
• Whose income comes from profits and gains of a business or profession.

For instance, if Shyam is a partner at a firm and earns more than Rs 50 lakh annually, then he will have to file ITR-3.

ITR-4 (SUGAM)

This form is applicable to individuals, HUFs and firms (excluding Limited Liability Partnerships) residing in India who have a total yearly income of up to Rs 50 lakh.

ITR-4 is applicable when the source of the income is:

• Business¹
• Profession ^{(( Section 44ADA, Income Tax Act, 1961))}
• Salary or pension
• One house property
• Other sources like interest etc. (not including lottery winnings and income from racehorses)

Further, a person who is not residing in India or a director of a company need not fill this ITR-4 Form.

ITR-5

This form is applicable to the following:

• Firm
• LLP (Limited Liability Partnership)
• Association of Persons/Body of Individuals
• Artificial Juridical Person ^{(( Section 2(31)(vii), Income Tax Act, 1961))}
• Local authority^{(( Section 2(31)(vi), Income Tax Act, 1961))}
• Representative assessee. A representative assessee could be an agent of a non-resident, the guardian of a minor/person of unsound mind, a trustee etc. who is authorised to receive or manage income on behalf of another person. ^{(( Section 160(1), Income Tax Act, 1961))}
• Cooperative society
• Societies registered under the Societies Registration Act 1860.

It is not applicable^{(( Sections 139(4A, 4B, 4C and 4D), Income Tax Act, 1961))} to individuals, HUF, a company and those persons filing ITR-7.

ITR-6

This form is applicable to companies, other than those companies claiming tax exemption for charitable or religious reasons.^{(( Section 11, Income Tax Act, 1961))} Further, you can find a list of tax-exempted institutions here.

ITR-7

This form is applicable to persons (including companies) such as:

• Every person receiving income from property held under trust, or for charitable or religious purposes ^{(( Section 139(4A), Income Tax Act, 1961))}
• Political parties ^{(( Section 139(4B), Income Tax Act, 1961))}
• News agencies, mutual funds, trade unions etc. ^{(( Section 139(4C), Income Tax Act, 1961))}
• Universities or colleges ^{(( Section 139(4D), Income Tax Act, 1961))}

ITR-Verification Form

You have to fill this form in situations where you have filed the data of the Return of Income in Forms ITR-1 (SAHAJ), ITR-2, ITR-3, ITR-4(SUGAM), ITR-5, ITR-7, but not verified electronically. Read more here.

1. Section 44AD and 44AE, Income Tax Act, 1961 [↩]