Income Tax Return (ITR) is a form that a person is supposed to submit to the Income Tax Department of India. It contains information about the person’s income and the taxes to be paid on it during the year. Information filed in ITR should pertain to a particular financial year, i.e. starting on 1st April and ending on 31st March of the next year. Income can be of various forms such as income from salary, profits and gains from business and profession, income from house property, income from capital gains, and income from other sources such as dividend, interest on deposits, royalty income, winning on lottery, etc. .
The Income Tax Department has prescribed 7 types of ITR forms - ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7, and the applicability of the form will depend on the nature and amount of income and the type of taxpayer. The most commonly applicable ITR forms are:
-
ITR-1 (also called as Sahaj): To be filed by resident individuals having total income up to Rs.50 lakh, having income from salaries, one house property, other sources (interest, etc.), and agricultural income up to Rs.5 thousand.
-
ITR-2: To be filed by individuals and HUFs not having income from profits and gains of business or profession.
-
ITR-3: To be filed by individuals and HUFs having income from profits and gains of business or profession.
-
ITR-4 (Sugam): To be filed by individuals, HUFs, and firms (other than LLP) being a resident having total income up to Rs.50 lakh and having income from business and profession which is computed on a presumptive basis.
-
ITR-5: To be filed by firms, LLPs (Limited Liability Partnership), AOPs (Association of Persons), BOIs (Body of Individuals), Artificial Juridical Person (AJP), Estate of deceased, Estate of insolvent, etc. .
Filing an Income Tax Return (ITR) is an important annual obligation for taxpayers. It is a formal declaration of their income and allows the government to assess the tax liability of individuals, businesses, and other entities.
