It’s tax season again, and if you’re like many, you’re probably wondering: Which Income Tax Return (ITR) form should I file? Picking the wrong one can lead to frustrating delays, notices from the tax department, or even your return getting rejected.
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Here’s a straightforward guide to help you understand which ITR form is for you:
ITR-1 (Sahaj): For Salaried & Simple Income Individuals
This is your go-to if you’re a resident individual earning up to ₹50 lakh from:
- Salary or pension
- One house property
- Other sources like interest or family pension
- Agricultural income under ₹5,000
Steer clear if: You’re a company director, hold unlisted shares, or have foreign assets or income.
ITR-2: For NRIs, Investors & Partners (No Business Income)
Choose this form if you’re an individual or a Hindu Undivided Family (HUF) not eligible for ITR-1. It covers:
- Capital gains
- Income from multiple house properties
- Foreign income
This is a must for: Non-residents, company directors, and firm partners who don’t have business income.
Skip this if: You earn income from a business or profession.
ITR-3: For Business Owners, Professionals & Freelancers
This form is designed for you if you have income from:
- A business or profession
- Being a partner in a firm or LLP with business income
It also includes those with unlisted shares, capital gains, or various other income types.
It’s mandatory for: Directors and individuals who don’t fit into ITR-1, ITR-2, or ITR-4.
ITR-4 (Sugam): For Presumptive Taxpayers
If you’re a resident individual, HUF, or firm (excluding LLPs) with total income up to ₹50 lakh and opt for the presumptive taxation scheme (under sections 44AD, 44ADA, 44AE), this form is for you. You can also include income from salary, one house property, and other sources, provided your Long-Term Capital Gains (LTCG) are under ₹1.25 lakh.
Avoid if: You have unlisted shares, foreign assets, or your income exceeds ₹50 lakh.
ITR-5: For LLPs, Firms, AOPs, Societies & Trusts
This form is specifically for:
- Limited Liability Partnerships (LLPs)
- Partnership firms
- Associations of Persons (AOPs)
- Bodies of Individuals (BOIs)
- Societies and trusts (unless they claim specific exemptions)
Individuals and HUFs should not use this form.
ITR-6: For Companies (Excluding Section 11 Exemptions)
This form is exclusively for companies that do not claim exemptions under the charitable trust provisions (Section 11).
Quick Check Before You File!
- Carried forward losses? Don’t use ITR-1 or ITR-4.
- Holding ESOPs or foreign shares? Opt for ITR-2 or ITR-3.
- Switching tax regimes? File Form 10-IEA before submitting ITR-3 or ITR-4.
- Are you a director or a partner? ITR-1 and ITR-4 are not for you.
Choosing the right ITR form is your crucial first step towards a hassle-free tax filing experience. Utilize tools like the Excel guide, read the eligibility rules carefully, and when in doubt, always consult a tax expert.
