Which ITR to File? A Comprehensive Guide

Introduction

Filing income tax returns (ITR) can be a daunting task, especially when you are unsure about the correct ITR form to use. Different categories of taxpayers need to file different ITR forms based on their income sources, employment type, and other factors. This article provides a detailed guide to help you determine which ITR to file, which ITR to file for salaried person, which ITR form to file for salaried person, documents required for ITR filing, and which ITR for business income.

Also Read: Benefits of Filling ITR

Understanding the Different Types of ITR Forms

The Income Tax Department of India has prescribed different ITR forms for various types of taxpayers. The choice of the correct ITR form depends on your source of income, total earnings, and residential status.

The following are the key ITR forms:

• ITR-1 (Sahaj)
• ITR-2
• ITR-3
• ITR-4 (Sugam)
• ITR-5, ITR-6, and ITR-7 (for specific entities)

Also Read: Can we Change Tax Regime While Filling ITR?

Which ITR to File for Salaried Person?

If you are a salaried individual, you need to choose the appropriate ITR form based on your income and other sources of earnings. Here are the applicable ITR forms:

ITR-1 (Sahaj) – For Salaried Individuals

ITR-1 is the simplest form used by salaried individuals who meet the following conditions:

• Total income up to Rs. 50 lakh
• Income from salary or pension
• Income from one house property (excluding brought forward losses)
• Income from other sources (excluding winnings from lottery and racehorses)
• Not having income from business or profession

ITR-2 – For Salaried Individuals with Additional Income Sources

ITR-2 should be filed by salaried persons if they:

• Have an income above Rs. 50 lakh
• Own multiple house properties
• Earn income from capital gains (e.g., sale of stocks, property, or mutual funds)
• Have foreign assets or income
• Are directors in a company

Also Read: How to CIBIL Score?

Which ITR Form to File for Salaried Person with Business Income?

If you are a salaried individual but also earn business income, the following forms apply:

ITR-3 – For Individuals Having Business or Professional Income

This form is applicable if:

• You have income from a proprietorship business or profession
• You are a salaried individual but also earn from freelancing or any self-employed activity
• You have income from capital gains or multiple house properties
• You are a partner in a firm

ITR-4 (Sugam) – For Presumptive Income Tax Filers

ITR-4 is suitable if:

• You have income from business or profession under the presumptive taxation scheme (Section 44AD, 44ADA, or 44AE)
• Your total income does not exceed Rs. 50 lakh

Also Read: ITR Filling Last Date

Which ITR Form to File for Business Income?

For individuals and businesses earning income from various sources, the correct ITR form varies:

• ITR-3: For individuals and HUFs earning income from business/profession
• ITR-4: For businesses opting for presumptive taxation
• ITR-5: For LLPs, partnership firms, and associations
• ITR-6: For companies (except those claiming tax exemption under Section 11)
• ITR-7: For trusts, political parties, and other specified entities

Documents Required for ITR Filing

To ensure smooth and error-free ITR filing, below are the documents required for ITR filing:

For Salaried Individuals

• PAN card
• Aadhaar card
• Form 16 from employer
• Salary slips
• Bank statements
• Interest certificates (if applicable)
• Form 26AS (for tax credit verification)
• House rent receipts (for HRA claims)
• Investment proof (for deductions under Section 80C, 80D, etc.)

For Business Income Earners

• PAN card and Aadhaar card
• Profit & loss statement
• Balance sheet
• Bank statements
• GST return (if applicable)
• TDS certificates
• Proof of business-related expenses

Also Read: What is Good CIBIL Score?

How to Choose the Correct ITR Form?

To determine which ITR form to file, consider the following factors:

Which ITR to File and Who is Eligible?

Choosing the right Income Tax Return (ITR) form is essential for accurate tax filing. Below is a breakdown of different ITR forms, their eligibility criteria, and exclusions.

Who Can File ITR-1 (Sahaj)?

ITR-1 is designed for individuals who:

• Qualify as Ordinarily Resident and have a gross annual income of up to ₹50 lakh.
• Earn income from salary, one residential property, and other sources (excluding lottery winnings and horse race earnings) with total exempted income up to ₹5,000.
• Have clubbed income, such as income from a minor child or spouse (if applicable).

Who Cannot File ITR-1?

• Non-Residents (NRIs) and Hindu Undivided Families (HUFs).
• Residents earning more than ₹50 lakh annually.
• Company directors.
• Individuals holding unlisted equity shares.
• Those carrying forward losses under “Income from House Property”.
• Individuals earning from foreign sources or holding assets outside India.

Who Can File ITR-2?

ITR-2 is suitable for:

• Non-Residents (NRIs), Resident but Not Ordinarily Residents (RNORs), and Ordinarily Residents.
• Individuals or HUFs with a total annual income exceeding ₹50 lakh.
• Company directors and individuals investing in unlisted shares.
• Individuals earning from multiple sources, including salary, multiple house properties, capital gains, and other sources of income.
• Individuals with foreign income or foreign assets.

Who Can File ITR-3?

ITR-3 applies to:

• Individuals and HUFs earning income from business or profession.
• Partners in a firm (excluding LLPs).
• Salaried individuals with business or professional income (freelancers, self-employed, consultants).
• Individuals earning from capital gains, multiple house properties, or other investments.

Who Can File ITR-4 (Sugam)?

ITR-4 is for:

• Individuals, HUFs, and firms (except LLPs) opting for presumptive taxation under Section 44AD, 44ADA, or 44AE.
• Freelancers, small business owners, and professionals with annual income up to ₹50 lakh.
• Individuals with income from salary, one house property, and other sources alongside presumptive business income.

Who Cannot File ITR-4?

• Individuals earning more than ₹50 lakh annually.
• Company directors and individuals investing in unlisted shares.
• Those with foreign assets or foreign income.
• Individuals seeking tax deductions on capital gains.

Who Can File ITR-5?

ITR-5 is applicable for:

• Partnership firms, LLPs, Associations of Persons (AOPs), and Body of Individuals (BOIs).
• Any entity (other than an individual, HUF, or company) not filing ITR-7.

Who Can File ITR-6?

• Companies not claiming tax exemption under Section 11 (income from charitable or religious trust).
• All businesses, except those filing ITR-7.

Who Can File ITR-7?

ITR-7 is for entities seeking tax exemption under Sections 139(4A), 139(4B), 139(4C), or 139(4D), such as:

• Charitable and religious trusts.
• Political parties.
• Scientific research institutions.
• News agencies.
• Educational institutions (universities, colleges, trade unions, hospitals, NGOs, and similar organizations).

Also Read: Income Tax Login

Steps to File ITR Online

Follow these steps to file your income tax return online:

1. Visit the Income Tax e-Filing Portal (https://www.incometax.gov.in/)
2. Login using your PAN, Aadhaar, or registered credentials
3. Select the ‘File Income Tax Return’ option
4. Choose the Assessment Year and ITR Form
5. Fill in the necessary details and upload required documents
6. Verify the details and compute your tax liability
7. E-verify your return using Aadhaar OTP, Net Banking, or other methods
8. Submit your return and download the acknowledgment receipt

Common Mistakes to Avoid While Filing ITR

• Choosing the wrong ITR form
• Not declaring all income sources
• Failing to report interest income
• Not verifying Form 26AS for tax credits
• Forgetting to e-verify the return

Conclusion

Filing the correct income tax return is crucial to ensure compliance and avoid penalties. Whether you are a salaried person, a freelancer, or a business owner, selecting the appropriate ITR form based on your income sources is essential. Keep all necessary documents handy and follow the correct filing procedure to ensure a smooth and hassle-free tax return filing experience.

By understanding which ITR to file, which ITR form to file for salaried person, which ITR for business income, and documents required for ITR filing, you can easily fulfill your tax obligations and avoid legal hassles. If in doubt, consult a tax expert to ensure accurate filing.

FAQs About ITR Filing

1. Can I file ITR-1 if I have multiple sources of income?

Ans. No, ITR-1 is only for salaried individuals with income up to Rs. 50 lakh and a single house property. If you have multiple sources of income (e.g., capital gains, rental income from more than one property), you should file ITR-2 or ITR-3.

2. What happens if I file the wrong ITR form?

Ans. If you file the wrong ITR form, your return may be considered defective, and you may receive a notice from the Income Tax Department. You will need to rectify and refile the correct form.

3. Is it mandatory to file ITR if my income is below the taxable limit?

Ans. No, it is not mandatory to file ITR if your total income is below the taxable limit. However, filing ITR can be beneficial for loan approvals, visa applications, and carrying forward losses.

4. Can I file ITR without Form 16?

Ans. Yes, you can file ITR without Form 16 by referring to your salary slips, Form 26AS, and bank statements to calculate your total income and deductions.

5. What is the last date to file ITR in India?

Ans. The last date for filing ITR for individuals is usually July 31 of the assessment year. However, deadlines may be extended by the government, so it is advisable to check the official website for updates.