Income Tax Return (ITR) is a form through which every taxpayer is obligated to present the tax* information such as the income earned and applicable tax* to the income tax department. There are different types of ITR forms. The applicability of the specific ITR form is based on the category of taxpayer, whether individuals, HUFs, business entities, etc., source of income and the extent of income earned. Therefore, as a responsible taxpayer, you should be able to identify the right type of ITR forms to file ITR returns and receive the appropriate refund, if any. So, here is a basic detail to help you out!

7 Types of ITR Forms That You Must Know About

Here are seven types of ITR forms that you must know about:

• ITR 1 or SAHAJ
  
  ITR 1 is for the resident individual whose total income includes:
  
  
  • Income earned from salary or pension
  • Income earned from one house property
  • Income from other sources.
  • Agriculture income up to ₹5000
    
    
  And ITR 1 is not applicable in case:
  
  
  • Total income is more than ₹50 Lakh.
  • If you earn capital gains
  • If you earn income from business or profession
  • If you are designated as the Director of a Company
  • If you are non-resident and resident but not ordinarily resident (RNOR)
  • If you own foreign assets or foreign income.
    
    
• ITR 2 
  
  ITR 2 is for an individual or Hindu Undivided Family (HUFs) whose total income includes:
  
  
  • Income from salary or pension more than ₹50 Lakh
  • Income from house property more than ₹50 Lakh
  • Income from other sources more than ₹50 Lakh
  • Having income from capital gains
  • If you are a Director in a Company
  • If you had invested in equity shares that are not listed
  • Being a non-resident or RONR(resident but not ordinarily resident)
  • Having foreign income or income from foreign assets,
  • Having an agriculture income of more than ₹5000
  •  Further, if you have to include your child's or spouse's income with you as an assessee, ITR 2 is relevant based on the income source.
  
  And ITR 2 is not applicable if:
  
  
  • Income is earned from business or profession.
    
    
• ITR 3
  
  The ITR 3 form is used by an individual or Hindu Undivided Family whose income includes:
  
  
  • Income from a business or profession.
  • If you had invested in equity shares that are not listed
  • If you are an Individual Director in a company
  • The return includes salary or pension, house property and income from other sources.
  • Income as a partner in a firm
    
    
• ITR 4 or Sugam
  
  ITR 4 is applicable for resident individuals and HUFs, Partnership firms other than LLPs whose total income includes:
  
  
  • Business income as per the presumptive income scheme stated under Section 44AD or 44AE
  • Professional income as per presumptive income stated under Section 44ADA
  • Income from salary or pension less than ₹50 Lakh
  • Income from house property less than ₹50 Lakh
  • Income from other sources less than ₹50 Lakh
  • Individuals who are freelancers with income from such sources as mentioned above and income, not more than ₹50 Lakh can opt for the presumptive scheme under Sections 44AD, 44AE, and 44ADA.
  
  And, ITR 4 is not applicable if:
  
  
  • Total income is more than ₹50 Lakh.
  • You have income from more than one house properties.
  • You own a foreign asset.
  • Have income from any source outside Indian borders.
  • Had invested in equity shares that are not listed.
    
    
• ITR 5
  
  ITR 5 is applicable for:
  
  
  • Firms
  • Limited Liability Partnerships
  • Association of Bodies
  • Body Of Individuals
  • Artificial Juridical Person
  • Estate Of Deceased
  • Estate Of Insolvent
  • Business Trust and Investment Fund
    
    
• ITR 6
  
  ITR 6 is for companies that do not claim an exemption under Section 11, income from the property held for charitable or religious purposes. And, ITR 6 can be filed by a taxpayer electronically only.
  
  
• ITR 7
  
  ITR 7 is for persons and companies who need to furnish returns under:
  
  
  • Section 139(4A) - For income from property held under a trust for charitable or religious purposes.
  • Section 139(4B) - For a political party, the total income without considering the section under 139A exceeds the maximum amount, which is not chargeable to tax.
  • Section 139(4C) - For Scientific research association, News agency, Association or Institution referred in Section 10(23A), Institution referred in Section 10(23B) and Fund, Institution, University or Educational Institution, Hospital or any Medical Institution.
  • Section 139(4D) - For Universities, Colleges, or other Institutions which do not furnish the income under any other provisions under this section.
  • Section 139(4E) - For Business Trust that does not furnish the income under any other provisions under this section.
  • Section 139(4F) - For investment funds referred in Section 115UB that does not furnish the income under any other provisions under this section.


As an individual filing your respective ITR form, you must consider the different investment opportunities to reduce the taxable income for your benefit. For instance, you can purchase whole life insurance and ensure you secure your family's financial future in your absence anytime while saving on tax^*. The premium you pay and the payouts from life insurance plans qualify for different tax^* deductions and exemptions under the Income Tax Act, 1961.


 

Our plans online provide access to varied traditional and comprehensive life insurance solutions. With life insurance plans you can save for the future while safeguarding your family in your absence. Also, life insurance plans provide various tax benefits on maturity amount, premiums paid, and death benefits received.



Conclusion



Filing the form of a return of income tax is a moral obligation for any individual or company earning an income in India. Different forms detail the provisions for the respective category of people to file their ITR. It is based on their source and extent of income earned during the financial year. Therefore, understand the different forms and their respective usage to optimise the benefits provided in the Income Tax Act, 1961!



L&C/Advt/2022/Nov/2923