Income Tax Return

Description

ITR forms and their purposes. ITR-1 is for individuals with income from salaries, one house property, other sources, and up to 50 lakh total income. ITR-2 is for individuals and HUFs not having income from business or profession. ITR-3 is for those who have income from a business or profession, like partners in firms. ITR-4 is for presumptive income under sections 44AD, 44ADA, etc. ITR-5 is for firms, LLPs, AOPs, BOIs, etc.

Income Tax Return (ITR) Services: A Guide to ITR-1 to ITR-5

1. ITR-1 (SAHAJ)

• Applicability: For resident individuals with income up to ₹50 lakh from:
  • Salary/Pension
  • One house property
  • Other sources (e.g., interest, dividends)
    Excludes: Business income, capital gains, or foreign assets.
• Due Date: July 31 (unless extended).
• Documents Needed: Form 16, interest certificates, rent receipts (if applicable).
• Process: File online via the Income Tax e-filing portal; no audit required.

2. ITR-2

• Applicability: Individuals/HUFs with:
  • Income exceeding ₹50 lakh
  • Capital gains (e.g., sale of property/stocks)
  • Foreign income/assets
  • Multiple house properties
    Excludes: Business income.
• Due Date: July 31.
• Documents Needed: Sale deeds, capital gain statements, foreign asset details.
• Common Issues: Incorrect reporting of capital gains; mismatch with Form 26AS.

3. ITR-3

• Applicability: Individuals/HUFs with income from:
  • Business/profession
  • Partnership in a firm
  • Includes salary, house property, and capital gains.
• Due Date: October 31 (if audit required); else, July 31.
• Documents Needed: Profit & Loss statements, audit reports (if applicable), partnership details.
• Tips: Maintain accurate books of accounts; reconcile with GST filings.

4. ITR-4 (SUGAM)

• Applicability: Residents, HUFs, and firms (excluding LLPs) opting for presumptive taxation:
  • Under Sections 44AD (business), 44ADA (profession), or 44AE (freight).
  • Income limit: ₹50 lakh.
• Due Date: July 31.
• Process: Declare income at 6-8% of turnover; no detailed financials needed.
• Common Issues: Misunderstanding presumptive scheme criteria.

5. ITR-5

• Applicability: Entities such as:
  • Firms, LLPs, AOPs, BOIs, co-operatives, and trusts.
    Excludes: Individuals, HUFs, companies (use ITR-6).
• Due Date: October 31 (if audit required).
• Documents Needed: Audit reports, partnership deeds, balance sheets.
• Key Note: Requires digital signature for filing.

General Filing Process:

1. Gather Documents: Form 16, bank statements, investment proofs.
2. Choose Correct ITR Form: Match income sources to avoid rejection.
3. Compute Tax: Use tax calculators or consult a CA for complex cases.
4. File Online: Upload via the e-filing portal; e-verify using Aadhaar OTP or EVC.

Penalties: Late filing incurs fines up to ₹10,000 (under Section 234F) + interest.

Tips:

• Cross-check income details with Form 26AS/AIS.
• E-verify returns promptly to avoid processing delays.
• Seek professional help for business income or foreign assets.

Conclusion: Selecting the correct ITR form is crucial to comply with tax laws. Timely filing avoids penalties and ensures quicker refunds. For complex cases (e.g., audits, foreign income), consult a tax advisor.