The Income Tax Return (ITR) is a form that Indian taxpayers must file with the Income Tax Department. It is an important financial document that outlines an individual’s or entity’s income, deductions, and tax liability for a certain financial year (FY). In this blog article, we will look at the many types of ITR forms for FY 2022-23 and AY 2023-24, who needs to file ITR , as well as why submitting ITR is so important.
Conditions for Filing ITR
Resident Individuals and HUFs
If you are a resident individual or a Hindu Undivided Family (HUF) and your total income before deducting expenses exceeds the basic exemption level of Rs. 2.5 lakh for individuals under 60 years of age, Rs. 3 lakh for senior citizens (60 to 80 years), and Rs. 5 lakh for super senior citizens (beyond 80 years), you must submit an ITR. However, if an individual opts for a new regime of taxation in that case the basic exemption limit is of 2.5 lakh irrespective of being senior or super senior citizen.
Non-Resident Individuals and Foreign Companies
Non-resident people and foreign corporations must file ITRs if they have income generating or accruing in India, regardless of the amount.
Individuals with Foreign Assets or Foreign Income
Individuals who own any overseas assets, including financial interests in any entity based outside India, or who have signing authority over any account located outside India, must file an ITR. Individuals who have earned any income from a source outside of India or who have foreign assets, including financial interest or signing authority, must also file an ITR.
Individuals Claiming Tax Treaty Benefit
If you are an individual who is entitled to a benefit or relief under a tax treaty with a foreign jurisdiction, you must file an ITR to do so.
Losses to be Carried Forward
If you had a loss during the fiscal year and want to carry it forward for a set-off against future gains, you must submit ITR. This applies to capital losses, commercial losses, and any other sort of loss permitted by the Income Tax Act.
Claiming Refunds
If you have overpaid taxes or have any tax deductions or exemptions that result in a refund, you must file an ITR to receive the refund from the Income Tax Department.
Government Contracts and TDS
If you have entered into any contract or company with the government and tax has been deducted at source (TDS) from your earnings, you must file an ITR to claim credit for the TDS deducted.
If an individual deposits more than 1 CR in a current account, ITR filing becomes mandatory.
If an individual deposits more than Rs. 50 lakhs in one or more savings accounts.
If an individual pays more than Rs. 1 lakh for electricity bill then also it becomes mandatory for one to file income tax return.
THE DUE DATE OF FILING INCOME TAX RETURN FOR FINANCIAL YEAR 2022-23 IS 31ST JULY 2023 IF YOU ARE NOT REQUIRED TO GET YOUR BOOKS AUDITED.
ITR Filing Importance
Filing ITR is not just a legal requirement, but it also has following benefits:
Compliance with the Law
Individuals and companies satisfying certain income criteria are required under the Income Tax Act of 1961 to file tax returns.
Proof of Income
ITRs serve as documentary proof of your income and may be significant for a number of purposes such as acquiring loans, visas, or government benefits.
Claiming Refunds
Filing an ITR allows you to obtain a refund if you paid more tax than you owed, resulting in tax savings.
Carry Forward Losses
Filing an ITR is required in order to carry forward certain losses, such as capital losses, that can be offset against future gains.
Financial Discipline
Individuals and businesses are encouraged to keep accurate records of their income and expenses by completing ITRs, which fosters financial discipline and flexibility.
Types of ITR Forms for FY 2022-23, AY 2023-24
ITR-1 (SAHAJ)
ITR-1 is the most basic version, and it applies to those who earn a wage, own one home, and have additional sources of income (excluding lottery winnings and racehorse revenue). If your total income is less than Rs. 50 lakhs, you can file ITR-1.
ITR-2
Individuals and Hindu Undivided Families (HUFs) who do not earn a living from a business or profession are eligible for ITR-2. It is for people who earn money from a wage, numerous houses, capital gains, and other means.
ITR-3
ITR-3 is intended for people and HUFs that earn a living through their own business or profession. If you are a partner in a partnership firm but not a partner in a Limited Liability Partnership (LLP), use this form.
ITR-4 or Sugam
Individuals, HUFs, and firms (other than LLPs) with presumed income from business or profession must file ITR-4. It applies if your total income is less than Rs. 50 lakhs and you have chosen the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE.
ITR-5
Firms, LLPs, Associations of Persons (AOPs), Bodies of Individuals (BOIs), Artificial Juridical Persons (AJPs), and Cooperative Societies are all covered by ITR-5. Individuals and HUFs who are unable to file ITR-1, ITR-2, ITR-3, or ITR-4 may use this form instead.
ITR-6
ITR-6 is intended for businesses that are not exempt under Section 11 (income from property kept for charitable or religious purposes).
ITR-7
ITR-7 applies to individuals and corporations who are required to file returns under particular parts of the Income Tax Act. It encompasses organizations such as charitable trusts, political parties, and institutions.
Frequently Asked Questions (FAQs)
Who is eligible to file an ITR-1 (SAHAJ)?
Can I file ITR-1 if I have capital gains income?
Who should submit an ITR-2?
Can I file ITR-2 if I have business or professional income?
Who must file Form ITR-3?
Can I submit ITR-3 if I am an LLP partner?
Who is eligible to file Form ITR-4?
Can I file ITR-4 if I have capital gains income?
Who should submit ITR-5?
Can I submit ITR-5 if I have salary income?
Who is required to submit ITR-6?
Can Limited Liability Partnerships (LLPs) file ITR-6?
Who should file ITR-7?
Can individuals file ITR-7 if they have wage or business income?
Conclusion
Filing your income tax returns on time and utilizing the correct ITR form is critical for following the law and reaping different rewards. The ITR forms described above accommodate various types of taxpayers, ensuring that individuals and entities record their income and claim deductions appropriately. For the most up-to-date information and instructions on submitting your ITR, always consult a tax professional or visit the official Income Tax Department website.
Tax Filing can be availed at TaxVic. For instant response reach out at info@taxvic.com.
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