Every taxpayer is required to declare to the Income-tax Department of the Government of India, a summary of income, tax paid which he earned during the year(between April to Mar of next year) in a form prescribed by the Government something like a report card in school. So one has to fill in Income Tax Return or ITR. There are many ITR forms for filing an income tax return such as ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4 Sugam, ITR-5 and ITR-6. These forms are released every year by Income Tax Department. To file Income tax returns one needs to fill the appropriate Income Tax return form. But which ITR form to fill? This article explains different kinds of income tax return form,why there are so many forms and which one to fill. An overview of which form is to be filled by an individual is given below.
Table of Contents
Overview of which ITR Form to Fill
There are many ITR forms for filing an income tax return such as ITR-1 (Sahaj) , ITR-2, ITR-3, ITR-4 Sugam, ITR-5 and ITR-6. These forms are released every year by Income Tax Department. To file Income tax returns one needs to fill the appropriate Income Tax return form.
- Right Assessment Year : For the income earned between 1 Apr 2021 to 31 Mar 2022 the Assessment Year or AY is 2022-23 (or Financial Year 2021-22)
- Income tax return by the individual must be filed before 31st Jul 2022 or you would have to pay penalty. ITR forms vary over the years so please check.
- Verify TDS details in Form 26AS
The different Income Tax returns form are based on
- Who has to fill (individual, Hindu Undivided Family(HUF), Business etc).Did you know that Fourth Character in specifies the type of tax-payer? For Individual’s it’s P , HUF it’s H, Firms F etc.
- Whether a resident of India or not . Our article Non Resident Indian – NRI explains who is NRI? NRI cannot file ITR1 in AY 2018-19
- On types of Income earned ex:
- Income from Salary or
- you have a house( Income from House Property) or
- you have sold and bought some Gold, Property, Shares, Mutual Funds (Income from Capital Gains).
- You do freelancing or run a business (Income from Business/Profession)
- Any other Income such as Interest From Fixed Deposit, Saving Bank Account Interest (Income from Other sources)
- Agricultural Income
- On amount of Income earned. ITR1 is for Income Less than 50 lakh.
- On whether losses are carried forward or not. If you have had losses when you sold Gold, Property, Shares, Mutual Funds (Income from Capital Gains) and you cannot adjust it this year. You can claim it in next 8 years.
- You have foreign assets or not such as Stock of MNC.
The Calculator below can suggest the Form you should fill based on the type of income and other details. YouTube Video explains which ITR to fill.
Our article ITR for FY 2018-19 or AY 2019-20 discusses changes in ITR Forms for this year.
Which ITR to be filed by Resident Indian Individual
The program given below helps you to find which ITR is to be filed by an Individual who is Resident,
|Which ITR to be filed by Resident Indian Individual|
|Have Income from Salary/Pension|
|Have Foreign Assets/Income such as stocks of MNC|
|How many Houses do you own
|Have you sold any land, house, debt mutual funds, gold|
|Agricultural Income more than 5000|
|Got Interest from FD, RD, NSC, Have Family pension, Received Gifts|
|Have Income more than 50 lakhs|
|Have presumptive income scheme as per Section 44AD/Sec 44ADA/ 44AE of the Income Tax Act|
|Are you partner in a firm|
|Are you self-employed, or freelancer, or earn income from business|
|Have winnings from lottery or horse racing|
|Have PPF, Dividends, Long Term Capital Gain in Equity, EPF Withdrawal more than 5 years|
|Have Interest Income from Saving Bank Account|
Video on Which ITR to Fill
When to File ITR1
Please check the requirements to File ITR1
Structure of ITR 1 Form?
- Part A – General Information
- Part B – Gross total Income
- Part C – Deductions and taxable total income
- Part D – Computation of Tax Payable
- Part E – Other Information
- Schedule IT – Detail of Advance tax and Self Assessment Tax payments
- Schedule TDS – Detail of TDS/TCS
When to File ITR2
Please check the requirements to File ITR2
Income Tax Assessment Process
Income tax assessment comprises of following stages:
- Filling Income Tax Return Form : Last Date 31 Jul 2018
- Computation of total income.
- Deducting valid deductions.
- Determination of the tax payable thereon.
- Paying the tax.
- E Verifying Income Tax Return or sending ITR-V
- Processing of Income Tax Return
Different Types of Income
Income Tax Return Form is based on the types of income earned. Income Tax Department classifies income into different types given below :
- Income from Salary : Income can be charged under this head only if there is/was an employer-employee relationship between the payer and payee. The total of income, after exemptions available, is known as Gross Salary and this is charged under the head income from salary. Pensions is also taxed under the head Salaries
- Income from House Property: If you own a house whether you live in it or it is rent out you have Income from House Property. Any residential or commercial property that you own will be taxed, even if it is not let out, it will be considered earning rental income and you will need to pay tax on it. Rental income is taxed subject to some exemptions for example on Home Loan. Our article Income from House Property and Income Tax Return discusses it in detail.
- Income from Business or Profession: Income earned through business or profession (ex: professional working as a freelancer) is charged under this category. The income chargeable to tax is the difference between the credits received on running the business and expenses incurred taking into account deductions such as depreciation of assets, rent, travelling.
- Income from Capital Gains: If you have sold property, land, Gold, shares, Mutual funds in the Financial Year then you have Income from Capital Gains. Any profit or gain arising from a transfer of a capital asset( such as property, equity or the stock market, gold) held as investments are chargeable to tax under the head capital gains. The gain can be on account or short- and long-term gains based on kind of asset and time for which it is held. Our article Basics of Capital Gains discusses it in detail.
- Income from other Sources : Any income that does not fall under any of the four heads of income above is taxed under the head income from other sources. Such as interest income from bank deposits, winning from game shows or lottery, gift from person other than relative
One may have 3-4 sources of income under one particular head or type. For example, a person might have two businesses A and B. But both are taxable under the same head business and profession. Income Tax FAQ answers various questions on income tax and return.
Types of documents needed for the different type of income is shown in the picture below:
Loss from earlier years
Income tax return also differs on whether they allow one to include loss filed in earlier years. It is also possible for one to have a loss of income or negative income such as Income from House Property, Income from Business and Profession, Capital gains. If you have sustained a loss in the financial year, then Income tax laws allow you to carry forward to the subsequent years for adjustment against its positive income. But you must make a claim of loss by filing your return before the due date. The tax loss carry forward reduces the overall tax liability during the earlier year(s) by incorporating the earlier loss as a reduction to taxable income. Our article Basics of Capital Gains, Capital Loss on Sale of House discusses it in detail.
An example of negative income or loss:
- The income from a self-occupied property will always be zero or negative (to the extent of interest paid or the specified limit, whichever is lower). As calculating income from house property for a self-occupied property, one has to take rental income as zero, one does not get credit for any municipal taxes paid nor will there be any standard deduction. But yes, you can deduct the interest paid on the loan availed subject to a specified limit(1,50,000 per owner)
- Mr. Mehta bought a house worth Rs 10 lakh (10,00,000) in Financial Year 2007-08. He sells the house in Jul 2012-13 for Rs 15 lakh( 15,00,000). Using the Cost Inflation Indexation(CII) figures for the financial year 2007-2008 and 2012-13 he finds that his purchase Indexed Cost is 15,46,279.49 and he has a loss on sale and indexed purchase price of -46,279.49
Income Tax Return (ITR) Forms
Details of forms for individuals and Hindu Undivided Family (HUF) are given below. If any income of spouse, minor child, etc. gets clubbed with the income of the assessee, then clubbed income is first categorized into different heads of income and then clubbed. Our article Clubbing of Income covers it in detail.
The table below gives a summary of which ITR Form to use for FY 2018-19 or AY 2019-20 for Individuals or Hindu Undivided Family (HUF)
|ITR Forms||ITR 1 (Sahaj)||ITR 2||ITR 3||ITR 4 (Sugam)|
|Total Income||Income Less than Rs 50 Lakhs||No Limit||No Limit||Income Less than Rs 50 Lakhs|
|Income from Salary||Yes||Yes||Yes||Yes|
|Income from House Property||Only One||More than One||More than One||More than One|
|Income from Business and Profession||No||No||Yes||Only Presumptive Business Income|
|Income from Other Sources||All except Income from Lottery/Race Horse||Yes||Yes||All except Income from Lottery/Race Horse|
|Exempt Income||Yes if Agriculture Income less than Rs 5,000||Yes||Yes||Yes if Agriculture Income less than Rs 5,000|
|Foreign Assets/Foreign Income||No||Yes||Yes||No|
|Carry Forward Loss||No||Yes||Yes||No|
- Income Tax for Beginner, Income Tax For Beginner – Part II
- E-Filing of Income Tax Return
- Filling ITR-1 : Bank Details, Exempt Income, TDS Details
- E-filing : Excel File of Income Tax Return
- Understanding Form 16: Tax on income, Understanding Perquisites, Understanding Form 12BA
The process of filing Tax Returns in India involves the use of various forms for different categories of Assessee, Incomes etc. Choose the appropriate form.