In India, the following categories of individuals and entities should file Income Tax Returns (ITR):
- Individuals (Resident Indian) whose total income exceeds the basic exemption limit:
- For most individuals, income above ₹2.5 lakh (old tax regime) or ₹3 lakh (new tax regime) requires filing ITR.
- Salaried individuals with income up to ₹50 lakh typically file ITR-1.
- Individuals with capital gains, multiple house properties, foreign assets, or income above ₹50 lakh file ITR-2.
- Those with income from business or profession file ITR-3 or ITR-4, depending on accounting and presumptive taxation.
- Hindu Undivided Families (HUFs) with taxable income.
- Firms, LLPs, companies, and other entities must file appropriate ITR forms (ITR-5, ITR-6, ITR-7).
- Non-Resident Indians (NRIs) must file if their Indian income crosses the specified threshold.
- Individuals with income from profits and gains of business or profession.
- Certain persons required under sections 139(4A),(4B),(4C),(4D) like trusts, political parties, etc.
Filing ITR is mandatory if total taxable income exceeds exemption limit or if the person wants to claim refunds, carry forward losses, or comply with regulatory requirements. Even in case of losses, filing ITR is beneficial for future tax planning. The choice of ITR form depends on income sources, income amount, taxpayer category, and residential status.
