Procedure for efiling income tax return (Which ITR form to use?)

Procedure for efiling income tax return (Which ITR form to use?)

Procedure for efiling income tax return (Which ITR form to use?)

The time for efiling income tax return is nearing so earlier we start preparing for, the better it would be. The IT department has released the efiling forms recently and one can use those to file their ITR.

The biggest question that haunt us is which ITR form should I use for efiling income tax return. So we have come up with a detailed & easy description on each forms, which would help you in choosing the correct form.

There are total 7 ITR forms (which are discussed below), the choice of form is primarily made on the basis of your income tax status and source of income. We have tried to describe the usability & applicability of each form in detail.

I. Using ITR 1 (Sahaj) for efiling income tax return

 Can be used by: Individual (Ordinarily Resident)

Having Total income: Up to Rs.50 lakh

Having Income from sources: Salaries, one house property, other sources (Interest etc.  excluding income from winnings from lottery or income from race horses, or income taxable under section 115BBDA)

Who cannot use this form: It cannot be used in the following cases:

-Where total income includes agricultural income of more than Rs. 5,000.

-Where total income includes income from business or profession

-Where total income includes loss under the head “Income from other Sources

-Where an Individual is having any assets located outside India or signing authority in any account located outside India.

What’s new in this return form?  The simplest ITR form now requires the taxpayer to furnish details of their income from salary and house property. Further, it also requires salaried taxpayers to furnish details of non-exempt allowances, value of perquisites, profit in lieu of salary and other deductions. With respect to income from House property it additionally requires reporting information such as tax paid to local authorities, interest payable on house loan etc.

 

II. Using ITR 2 for efiling income tax return

Can be used by: Individual & HUF

Having Total income: Over Rs.50 lakh

Having Income from sources: Salaries, one house property, capital gains, foreign income, agricultural income over Rs 5000 & Income from other sources (Interest etc.)

Who cannot use this form: It cannot be used in the following cases:

-Where an individual or an Hindu Undivided Family’s total income includes income from Business or Profession.

What’s new in this return form?  The taxpayers using this form to file their ITR would be required to furnish a detailed computation of their capital gains. They would be required to provide details on actual sales consideration, Fair Market Value (FMV). Further, the taxpayers claiming investment based exemption, would furnish details like date of sale of original capital asset and amount of exemption claimed for each capital gain separately.

 

III. Using ITR 3 for efiling income tax return

Can be used by: Individual & HUF

Having Income from sources: All sources as specified in ITR 2 and Income from business & profession

Having Total income: Not applicable

Who cannot use this form: ITR – 3 cannot be used by any person other than an individual or a HUF. Further, an individual or a HUF not having income from business or profession cannot use ITR –3.

 

IV. Using ITR 4 (Sugam) for efiling income tax return

Can be used for: Declaring Income on presumptive basis  

Having Income from sources: Business income under section 44AD, 44AE, 44ADA etc., Income from Salary, one house property, other sources (Interest etc.  excluding income from winnings from lottery or income from race horses)

Having Total income: As per the relevant section

Who cannot use this form: It cannot be used in the following cases:

– Where total income includes income from Capital Gains.

– Where total income includes agricultural income of more than Rs. 5,000.

– By any resident having income from any source outside India

– Where total income includes income from speculative business and other special incomes.

-Where total income includes income from agency business or income in the nature of commission or brokerage.

-Where an Individual is having any assets located outside India or signing authority in any account located outside India.

What’s new in this return form? This new ITR 4 form requires the taxpayer to provide additional financial details such as amount of secured/unsecured loans, advances, fixed assets, capital account, etc. Further, ITR 4 also requires the taxpayers to provide the GSTIN & aggregate turnover as reported in the GST returns.

 

 V. Using ITR 5 for efiling income tax return

 Can be used by: LLP, AOP, BOI, Local Authority, Artificial Jurisdiction person

Having Income from sources: Not applicable

Having Total income: Not applicable

Who cannot use this form: This form cannot be used by trusts, political parties, institutions, colleges, investment fund etc

 

VI. Using ITR 6 for efiling income tax return

Can be used by: Companies

Having Income from sources: Not applicable

Having Total income: Not applicable

 

VII. Using ITR 7 for efiling income tax return

 Can be used by: It is applicable to persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F) (i.e., trusts, political parties, institutions, colleges, investment fund etc.)

Having Income from sources: Not applicable

Having Total income: Not applicable

P.s. It is recommended that the taxpayer should file the ITR in time & seek professional help whenever in doubt in order to avoid confusion & income tax notices.

 (The author is a CA in practice at Delhi and can be contacted at: E-mail: abhinandansethia90@gmail.com, Mobile: +91-9811741451)

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