Which ITR Should I File? Types of ITR Forms for FY 2023-24 (AY 2024-25)

Choosing the correct Income Tax Return (ITR) form is crucial for accurately reporting your income and ensuring compliance with tax regulations. For th

Choosing the correct Income Tax Return (ITR) form is crucial for accurately reporting your income and ensuring compliance with tax regulations. For the Financial Year 2023-24 (Assessment Year 2024-25), the Indian Income Tax Department provides various ITR forms tailored to different taxpayer categories and income sources. 

From ITR-1 for salaried individuals with simple income structures to ITR-7 for entities like charitable trusts and political parties, each form serves a specific purpose. Factors such as your income source, total income, residential status, and the nature of your business or profession determine which form you should file. 

Selecting the appropriate ITR form helps avoid penalties and ensures that you can claim all eligible deductions and exemptions. Understanding the different ITR forms, such as ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4 (Sugam), and others, is essential for accurate and compliant tax filing in the upcoming financial year.

What is ITR?

Income Tax Return (ITR) is a form that individuals and entities in India use to report their income, expenses, and other financial details to the Income Tax Department. Filing an ITR is mandatory for individuals and businesses that meet certain income criteria. 

Purpose:

• To declare the income earned from various sources such as salary, business profits, rental income, capital gains, and other sources.
• To compute the tax liability and pay any due taxes or claim refunds for overpaid taxes.

Types of ITR Forms

In India, the Income Tax Department provides various ITR forms to cater to different categories of taxpayers. Each form is designed to accommodate specific income sources and tax scenarios. Here are the types of ITR forms available:

1. ITR-1 (Sahaj)

Eligibility: For resident individuals with total income up to ₹50 lakh, having income from salaries, one house property, other sources (interest, etc.), and agricultural income up to ₹5,000.

Not for: Individuals with more than one house property, capital gains, business/profession income, foreign assets/income, etc.

2. ITR-2

Eligibility: For individuals and Hindu Undivided Families (HUFs) not having income from business or profession.

Includes: Income from salary/pension, house property, capital gains, other sources, and foreign assets/income.

3. ITR-3

Eligibility: For individuals and HUFs having income from profits and gains of business or profession.

Includes: Income from business/profession, salary/pension, house property, capital gains, and other sources.

4. ITR-4 (Sugam)

Eligibility: For individuals, HUFs, and firms (other than LLPs) having income from business/profession computed under presumptive taxation scheme (Sections 44AD, 44ADA, or 44AE).

Not for: Individuals with total income exceeding ₹50 lakh, more than one house property, capital gains, etc.

5. ITR-5

Eligibility: For firms, LLPs, AOPs (Association of Persons), BOIs (Body of Individuals), AJPs (Artificial Juridical Persons), cooperative societies, and local authorities.

Includes: All income sources applicable to these entities.

6. ITR-6

Eligibility: For companies other than those claiming exemption under Section 11 (income from property held for charitable or religious purposes).

Includes: All income sources applicable to companies.

7. ITR-7

Eligibility: For persons including companies required to furnish returns under Sections 139(4A), 139(4B), 139(4C), 139(4D) (charitable/religious trusts, political parties, research associations, news agencies, etc.).

Includes: All income sources applicable to these entities.

8. ITR-V

Purpose: This is an acknowledgment form used when filing returns online without a digital signature.

Procedure: After e-filing, the ITR-V form needs to be signed and sent to the Income Tax Department CPC in Bengaluru for verification.

Selection Criteria:

• Income Source: Determine whether your income is from salary, business, capital gains, etc.
• Total Income: Check if your total income exceeds specific limits.
• Entity Type: Identify if you are filing as an individual, HUF, firm, company, etc.
• Special Circumstances: Consider additional factors like foreign assets, directorship in companies, etc.

Each form serves a unique purpose and selecting the appropriate one is crucial for compliance and accurate tax filing.

READ ALSO : What is ITR and What Happens If Income Tax Return is Not Filed?

Why should you file ITR?

• Legal compliance: It's a mandatory requirement by law.
• Claiming refunds: If you've overpaid taxes, you can claim a refund.
• Proof of income: Required for loan, credit, and visa applications.
• Carry forward losses: Allows you to offset losses against future income.
• Avoiding penalties: Timely filing helps avoid fines and interest charges.
• Establishing financial record: Builds a solid financial history over time.
• Facilitates compliance: Required for government tenders and contracts.
• Statutory requirement for transactions: Necessary for high-value transactions like property purchases.
• Contribution to national development: Taxes collected are used for public services and infrastructure.
• Personal financial planning: Helps in managing income, expenses, and investments.

When is it mandatory to file income tax returns (ITR) in India?

In India, it is mandatory to file Income Tax Returns (ITR) under certain circumstances. Here's when it is obligatory to file ITR:

Mandatory ITR Filing Requirements:

Individuals: Individuals below the age of 60 years need to file ITR if their total annual income exceeds the basic exemption limit, which is ₹2.5 lakh in a financial year.

Senior Citizens: Individuals aged 60 years or above but below 80 years need to file ITR if their total annual income exceeds ₹3 lakh in a financial year.

Super Senior Citizens: Individuals aged 80 years or above need to file ITR if their total annual income exceeds ₹5 lakh in a financial year.

Companies: Every company, irrespective of whether it has made any income or incurred any loss during the financial year, is required to file ITR.

Firms: All partnership firms, LLPs (Limited Liability Partnerships), and other types of firms are required to file ITR, irrespective of their income.

Individuals with Foreign Assets/Income: Individuals who own foreign assets or earn income from foreign sources are required to file ITR, regardless of the amount of income earned.

Residents with Signing Authority in Foreign Accounts: Residents who have signing authority in any foreign account are required to file ITR.

Individuals Claiming Tax Treaty Benefits: Individuals claiming relief under tax treaty provisions are required to file ITR.

Individuals Claiming Exemption Under Section 10: Individuals claiming exemption under Section 10 (which includes agricultural income exceeding ₹5,000) are required to file ITR.

Loss Adjustment: Individuals or entities who have incurred losses and wish to carry forward or set off such losses in subsequent years are required to file ITR.

ALSO READ: Income Tax Slabs (New & Old Regime Tax Rates)

Filing ITR is not only a legal obligation but also ensures compliance with tax laws and provides various benefits such as claiming refunds, establishing financial records, and availing loans and credit facilities. It's important to consult with a tax advisor or refer to the latest tax regulations for specific filing requirements.

Who are exempted from filing Income Tax Returns?

Certain individuals are exempted from filing Income Tax Returns (ITR) in India if they meet specific criteria. Here are categories of individuals who may be exempted from filing ITR:

Exemptions from ITR Filing:

Individuals Below Basic Exemption Limit:

Individuals whose total annual income is below the basic exemption limit are not required to file ITR. In a financial year, the basic exemption limit is ₹2.5 lakh for individuals below 60 years, ₹3 lakh for senior citizens (aged 60-80 years), and ₹5 lakh for super senior citizens (aged 80 years and above).

Super Senior Citizens with No Income from Business or Profession:

Super senior citizens (aged 80 years and above) with no income from business or profession are exempted from filing ITR if their income consists only of pension and interest income.

Individuals with Income Below Taxable Threshold:

Individuals with income below the taxable threshold and no tax liability after claiming deductions and exemptions are not required to file ITR.

Exempt Income Categories:

Certain types of income, such as agricultural income up to ₹5,000, income from tax-exempt investments like PPF (Public Provident Fund), EPF (Employee Provident Fund), and tax-free bonds, may not require ITR filing.

Non-Resident Indians (NRIs) with No Income in India:

NRIs who are not earning any income in India or whose income is exempt under the Double Taxation Avoidance Agreement (DTAA) may be exempted from filing ITR.

Exemption under Section 10:

Individuals eligible for exemption under specific sections of the Income Tax Act, such as Section 10, which provides exemption for certain categories of income like agricultural income, may not be required to file ITR.

Individuals with TDS Deducted at Source:

Individuals whose income is subject to Tax Deducted at Source (TDS) and for whom TDS has been duly deducted and deposited by the deductor may be exempted from filing ITR if their total income is below the taxable threshold.

It's essential to review the latest tax regulations and consult with a tax advisor to determine eligibility for exemption from filing ITR based on individual circumstances and income sources.

Which ITR to file?

The Income Tax Return (ITR) form you need to file depends on your sources of income, residential status, and other specific circumstances. Here's a simplified guide to help you determine which ITR form to file:

Common ITR Forms:

ITR-1 (Sahaj):

For individuals having income from salaries, one house property, other sources (excluding winning from lottery and income from race horses), and total income up to ₹50 lakh.

ITR-2:

For individuals and Hindu Undivided Families (HUFs) not eligible to file ITR-1 and having income from sources other than profits and gains from business or profession.

ITR-3:

For individuals and HUFs having income from profits and gains of business or profession. This form is applicable if you are a partner in a firm but not carrying out business/profession under a proprietorship.

ITR-4 (Sugam):

For individuals, HUFs, and firms (other than LLPs) having income from business or profession computed under presumptive taxation provisions of Sections 44AD, 44ADA, or 44AE.

ITR-5:

For firms, LLPs, Association of Persons (AOPs), Body of Individuals (BOIs), Artificial Juridical Persons (AJP), Co-operative societies, and local authorities.

ITR-6:

For companies other than companies claiming exemption under Section 11 (Income from property held for charitable or religious purposes).

ITR-7:

For persons including companies required to furnish return under Sections 139(4A) or 139(4B) or 139(4C) or 139(4D) (i.e., trusts, political parties, institutions, colleges, investment funds).

Determining Factors:

Sources of Income: Consider the types of income you have, such as salary, house property, capital gains, business/profession income, or income from other sources.

Residential Status: Non-resident Indians (NRIs) have different filing requirements and may need to use specific ITR forms.

Eligibility for Presumptive Taxation: If you qualify for presumptive taxation under Sections 44AD, 44ADA, or 44AE, you may use ITR-4 (Sugam).

Consultation:

If you're unsure which ITR form to file, it's recommended to seek advice from a tax professional or consult the Income Tax Department's guidelines to ensure accurate filing based on your specific circumstances. Incorrect filing can lead to penalties and legal consequences.

ALSO READ:

• ITR Filing Last Date FY 2023-24 (AY 2024-25)
• How to File Income Tax Return Online in India? - Step by Step Guide

Income Tax Form FY 2023-24 PDF Download

You can download Income Tax Return (ITR) forms for the Financial Year 2023-24 in PDF format from the official website of the Income Tax Department of India. Here are the direct links to download the respective ITR forms

• ITR-1 (Sahaj): Download ITR-1 Form
• ITR-2: Download ITR-2 Form
• ITR-3: Download ITR-3 Form
• ITR-4 (Sugam): Download ITR-4 Form
• ITR-5: Download ITR-5 Form
• ITR-6: Download ITR-6 Form
• ITR-7: Download ITR-7 Form

You can click on the provided links to directly download the respective ITR forms in PDF format from the official website of the Income Tax Department. Make sure to select the appropriate form based on your income sources and eligibility criteria for accurate filing.