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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 and ITR-4, 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.

Which ITR to Fill for FY 2018-19 or AY 2019-20

Which ITR to Fill for FY 2018-19 or AY 2019-20

Overview of which ITR Form to Fill for FY 2018-19/ AY 2019-20

There are many ITR forms for filing an income tax return such as ITR-1 (Sahaj) , ITR-2, ITR-3, ITR-4, 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 2018 to 31 Mar 2019 the Assessment Year or AY is 2019-20 (or Financial Year 2018-19)
  • Income tax return by the individual must be filed before 31st Jul 2019 or you would have to pay penalty. ITR forms vary over 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 PAN 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.

Mistakes while Filing ITR and CheckList before submitting ITR

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
Do you
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

Which ITR to Fill

You have to fill ITR

Details

Video on Which ITR to Fill

When to File ITR1

Please check the requirements to File ITR1

When should you File ITR1

When should you 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

When should you File ITR2

When should you 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 :

  1. 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
  2. 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.
  3. 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.
  4. 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.
  5. 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:

Document proof for different types of income

Document proof for different types of income

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 GainsCapital 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)
Non-Resident Indian No Yes Yes Yes
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
Capital Gains No Yes Yes No
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

Related Articles:

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.

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