Income tax return filing 2024: How to choose the right ITR form

The Indian Income Tax Department provides assorted income taxation instrumentality (ITR) forms tailored to antithetic payer scenarios. Selecting the due signifier ensures precise and streamlined reporting of your income. 

The Central Board of Direct Taxes (CBDT) released 7 ITR forms for FY 2023-24 (AY 2024-25). The determination of which ITR signifier to usage depends connected factors specified arsenic idiosyncratic income sources, taxable earnings, and payer categories, including individuals, Hindu Undivided Families (HUFs,) companies, etc. It tin beryllium challenging to find the close signifier to use. 

Here’s a little overview of erstwhile to usage respective communal ITR forms:

Who tin record ITR-1 (Sahaj)?

Resident and ordinarily nonmigratory individuals tin record ITR-1. Their full income from each sources indispensable not transcend ₹50 lakh, and their income should originate from

• Salary oregon pension
• One location spot (with exceptions for jointly owned properties)
• Other sources specified arsenic interest, dividends, oregon household pension (with a headdress of ₹5,000 connected cultivation income).

The pursuing individuals cannot record ITR-1:

- Non-resident Indians (NRIs)

- Resident Not Ordinarily Resident (RNOR) taxpayers

- Individuals with income exceeding ₹50 lakh

- Individuals with income from concern oregon profession

- Individuals with cultivation income exceeding ₹5,000

- Individuals with income from superior gains (short-term oregon long-term)

- Individuals with investments successful unlisted equity shares

- Directors of companies

- Individuals claiming taxation deduction nether Section 194N of the Income Tax Act

- Individuals with deferred income taxation connected ESOPs received from eligible startups.

Who tin record ITR-2?

The ITR-2 signifier applies to a broader spectrum of taxpayers successful examination to ITR-1. Here’s an overview of individuals who tin record ITR-2:

Individuals and Hindu Undivided Families (HUFs): This class encompasses the bulk of idiosyncratic taxpayers and household units.

ITR-2 is suitable for individuals with income from divers sources, including:

Salary/Pension: Regular income from wage oregon pensions.

House property: Income generated from 1 oregon aggregate location properties.

Capital gains: Income derived from the merchantability of investments oregon property, some short-term and long-term.

Other sources: Income from assorted sources specified arsenic lottery winnings, equine racing, oregon ineligible gambling (including cultivation income exceeding Rs. 5,000).

Foreign income: Income earned from sources extracurricular India.

NRIs tin besides record ITR-2 nether circumstantial conditions. However, ITR-2 does not use to individuals earning income from businesses oregon professions operated arsenic sole proprietorships, partnerships, etc. (There is simply a abstracted ITR signifier designated for concern income).

There is nary fixed income bounds for eligibility to record ITR-2. However, it is mostly recommended for individuals whose income operation is much analyzable than what is covered nether the simpler ITR-1 criteria.

Who tin record ITR-4 (Sugam)?

The ITR-4 signifier is tailored for a circumstantial class of taxpayers with aggregate income sources. Individuals, HUFs, and concern firms (excluding Limited Liability Partnerships oregon LLPs): This class includes assorted idiosyncratic taxpayers, household units, and definite types of concern entities.

ITR-4 is suitable for individuals with income from:

• The signifier is specifically applicable if income is computed nether presumptive taxation schemes provided by sections 44AD, 44ADA, oregon 44AE of the Income Tax Act. These schemes are intended for tiny businesses and professionals with turnover thresholds.
• Income from regular wage oregon pensions tin besides beryllium reported successful ITR-4.
• You tin see income from up to 1 location spot successful ITR-4.
• Income from different sources specified arsenic involvement connected savings accounts, deposits, oregon taxation refunds tin beryllium reported, with definite restrictions (excluding income from lottery and equine racing wins).

The cardinal criterion for eligibility to record ITR-4 is utilizing presumptive taxation schemes for concern oregon nonrecreational income. If your concern does not suffice for these schemes oregon if you support regular books of accounts, ITR-4 whitethorn not beryllium due for you.

The presumptive taxation schemes nether ITR-4 person defined turnover thresholds for businesses oregon professions. Ensure that your concern meets these limits to suffice for filing nether this scheme.

There are further ITR forms disposable for companies and circumstantial circumstances, but these are the astir commonly utilized forms for idiosyncratic taxpayers. If you are uncertain whether ITR-4 applies to you, it is advisable to verify connected the Income Tax Department website oregon question proposal from a taxation advisor who tin supply personalized guidance based connected your circumstantial income circumstances.

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Published: 28 Jun 2024, 04:37 PM IST