Income Tax Return for Individuals

Income Tax Return is a form in which an Assessee files his information about Income and tax payable to the Income Tax Department. According to the income tax laws, Income Tax Return must be filed every year by a person or business that makes any income in the form of a salary, business gains, earning from house property or gains from dividends, capital or other sources during a financial year. 

    Introduction

    Due Date to file ITR For Financial year 2022-23

    The Income Tax Act 1961 obligates citizens to file returns for every financial year within the specified due date. The due date to file Income Tax Return for the individuals who do not need to get their ITR audited under any law is 31th July 2023 and for those who need to get their ITR audited under law, the due date is 30th September which may be extended by the department. However, this is changeable on the issuance of directive to this effect by the Income Tax Department or the Ministry of Finance, India.

    Belated return for F.Y. 2022-23 is 31st December 2023.

    Conditions that mandate the filing of Income Tax Returns for Individual

    • When the gross annual income exceeds the specified limit.
    • When the gross annual income of an individual exceeds the specified limit, it becomes mandatory for him to file an Income Tax Return.

    The prescribed limit for the same is given below as per the different age of the individuals in a tabulated manner:

    • If your gross annual income is more than-
      Particulars Amount
      For individuals less than 60 years of age INR 2.5 Lakh
      For individuals is above 60 years of age but less than 80 years INR 3.0 Lakh
      For individuals above 80 years of age INR 5.0 Lakh
    • When there is more than one source of income such as capital gains, house property etc.
    • When the taxpayer wants to behest for an income tax refund from the IT department
    • When there is earning from or investment made in foreign assets during the FY.
    • When the taxpayer want to apply for a visa or a loan
    • When the taxpayer is a firm or company or a firm (regardless of gain or loss)

    Types of ITRs

    There are seven types of returns viz. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7 to be filled by the individual based on a few circumstances like the source of income, total amount of income in F.Y. etc. Let us have deeper dive into these circumstances and type of ITR that is suitable for them. 

    ITR-1 OR SAHAJ

    Suitable for: Resident individual whose source of total income for the F.Y. 2022-23 includes: 

    • Salary or Pension
    • One House Property (other than the case when loss is carried forward from preceding years)
    • Other Sources (other than winning from Lottery and Horse Races)
    • Agriculture (up to INR 5000)

    Conditions when use ITR 1 Form is restricted

    • Total income surpassing the limit of INR 50 lakh
    • Agricultural income surpassing the limit of INR 5000
    • Availability of taxable capital gains
    • In the presence of income from business/profession
    • In the presence of income from more than one house property
    • When the taxpayer is company’s director
    • When the investments are made in unlisted equity shares at any point of time in the financial year
    • When the resident taxpayer owns assets that draws financial interest, outside India (that includes signing authority in any account outside the country).
    • When the resident taxpayer is not ordinarily resident (RNOR) and non-resident
    • When the taxpayer owns foreign assets/foreign income
    • When the taxpayer is assessable w.r.t income of another person on which tax is deducted in other person’s hand.

    ITR-2

    Suitable for: Individual or a Hindu Undivided Family (HUF) who are not involved in carrying out any business or profession but the source of total income for the FY 2022-23 includes: 

    • Salary or Pension
    • House property
    • Other sources including gain from lottery and racing horses
    • Capital gains from property
    • Foreign income/ foreign assets
    • Loss when the investment is sold out
    • Resident who is not ordinarily resident and a non-resident as well
    • Agricultural income surpassing the limit of INR 5,000
    • Director at Listed Company & Unlisted Company
    • When the investment is made in unlisted equity shares at any point of time in the F.Y.

    Note: Total income from the first four sources must be above 50 Lakhs)
    When the income of another individual like spouse or child is clubbed together with assesses income, ITR 2 is allowed to be used when income comes under any of the above-mentioned categories. 

    Ineligibility to file ITR 2

    An individual whose total income for the FY 2022-23 encompasses Income from Business or Profession are not eligible to file ITR 2.

    ITR-3

    Suitable for: Individual or Hindu Undivided Family whose source of income is proprietary business or profession i.e. the individuals or HUFs whose source of income includes: 

    • Income from Business or Profession
    • When the taxpayer is an Individual Director in any company
    • When investment is made in unlisted equity shares at any point of time during the F.Y.
    • Income may include Income from House property, Salary/Pension, other sources, bonus, interest, commission or remuneration from the partnership firm
    • Taxpayers registered under presumptive taxation scheme and having a turnover above 2 crore.
    • HUFs and Individuals who are partners in a business but do not perform business operations under proprietorship.

    ITR-4 or Sugam

    Suitable for: Individuals & HUFs who are residents with profession or business as a source of income. Partnership firms (except LLPs) and individuals who are registered under the presumptive income scheme as per Section 44AD, 44ADA and 44AE of the Income Tax Act are also eligible to file ITR-4.

    Note:When the turnover of the business surpasses the limit of INR 2 crore, the taxpayer becomes ineligible to file ITR-4, instead he needs to file ITR-3.

    Ineligibility to file ITR 4

    Following conditions knocks the eligibility to file ITR-4

    • When the total income surpasses the limit of INR 50 lakh
    • When income is from more than a single house property
    • When the loss has been/is to be carried forward under any head of the income
    • When the taxpayer owns any foreign asset
    • When the taxpayer has signing authority in any account in foreign country
    • When the taxpayer has source of income in foreign country
    • When the taxpayer is company’s director
    • When the taxpayer have/had made investments in unlisted equity shares at any point of time in the financial year
    • When the taxpayer is a resident not ordinarily resident (RNOR) and non-resident
    • When the taxpayer has foreign assets or income
    • When the taxpayer is assessable w.r.t income of another individual in concern of which tax is taken away in the part of the other individual.

    ITR-5

    Suitable for: Firms, AOPs (Association of persons), LLPs, BOIs (Body of Individuals), Estate of deceased, Artificial Juridical Person (AJP), Estate of insolvent, Investment Fund and Business Trust. 

    ITR-6

    Suitable for: Companies that are not claimant u/s 11 of the Income Tax Act, 1961 or companies other than those which need to file ITR in Form ITR-7. 

    ITR-7

    Suitable for: Tax assessee who needs to file ITR under the subsections of Section 139 of the Income Tax Act, 1961 viz. section- 139(4A), 139(4B), 139 (4C) and 139 (4D). 

    An Overview: Types of ITRs and Relevance

     Form Applicability Salary Exempt Income Capital Gains House Property Business Income Other Sources
    ITR-1 Resident Indian Individuals and HUFs ✓ Yes. Note: Income from agriculture must be equal to/less than INR 5,000. ✘ ✓ Note: Income must be only from one house property ✘ ✓
    ITR-2 Individuals and HUFs ✓ ✓ ✘ ✓  ✘ ✓
    ITR-3 Individuals, HUFs and Partner in a firm. ✓ ✓ ✘ ✓ ✓ ✓
    ITR-4 Firm, HUF, or Individual ✓ ✓ Note: Income from agriculture must be equal to/less than INR 5,000. ✓ ✓ Note: Income must be only from one house property Only for the presumptive business income. ✓
    ITR-5 LLPs or Partnership Firms ✘ ✓ ✘ ✓ ✓ ✓
    ITR-6 Companies ✘ ✓ ✘ ✓ ✓ ✓
    ITR-7 Trusts ✘ ✓ ✘ ✓ ✓ ✓

    So, ITR 1, ITR 2, ITR 3 and ITR 4 are the only ITR forms for individuals. Now we will discuss the process to download the ITR Forms. 

    Download & File the ITR forms

    • ITR forms are downloadable from the official website of the Income Tax Department - https://www.incometaxindia.gov.in/pages/downloads/income-tax-return.aspx).
    • Individuals may opt for an ITR among ITR-1, ITR-2, ITR-3, ITR-4, and ITR-7, based on the type of income he/she makes.
    • The Income Tax Returns are available in the PDF format and can be filed on the official website of Income Tax, following the instructions available on the same website - https://www.incometaxindiaefiling.gov.in/home

    Everyone is not well-acquainted with the ITR filing process, understanding that the IT Department has presented a few simple steps to file ITR on its official website. However, yet it remains a complicated process so to make it a smooth sailing process, some CA consultancies or companies that CA/CS services file the ITR on behalf of the Assessee by charging a nominal fee.

    However, it is a duty of the assessee to choose right for right services. For more information, get in touch with us. Happy to help you!

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