ITR File Types

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.

ITR File Types

Frequently Asked Questions (FAQs)

Who is eligible to file an ITR-1 (SAHAJ)?

Individuals with salaries, one dwelling property, and other sources of income (excluding lottery winnings and racehorses) can submit ITR-1. The overall income should be in the range of Rs. 50 lakhs.

Can I file ITR-1 if I have capital gains income?

Individuals with capital gains income are not qualified to submit ITR-1. They should think about filing ITR-2.

Who should submit an ITR-2?

Individuals and Hindu Undivided Families (HUFs) without company or professional income can submit ITR-2. It applies to those who earn money via a wage, numerous houses, capital gains, and other sources.

Can I file ITR-2 if I have business or professional income?

No, if you have income from a business or profession, you should file ITR-3 rather than ITR-2.

Who must file Form ITR-3?

Individuals and HUFs with income from a sole proprietorship or profession should file ITR-3. It applies to persons who are partners in a partnership firm but not to individuals who are partners in a Limited Liability Partnership (LLP).

Can I submit ITR-3 if I am an LLP partner?

No, if you are an LLP partner, you should file ITR-5 rather than ITR-3.

Who is eligible to file Form ITR-4?

Individuals, HUFs, and firms (other than LLPs) with presumptive business or professional income can file ITR-4. The total income should not exceed Rs. 50 lakhs, and they must have chosen the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE.

Can I file ITR-4 if I have capital gains income?

Individuals with capital gains can submit ITR-4 if their total income is less than the stated limit.

Who should submit 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.

Can I submit ITR-5 if I have salary income?

Yes, individuals with salary income can use this form to file ITR-5.

Who is required to submit ITR-6?

ITR-6 is intended for businesses that are not excluded under Section 11 of the Income Tax Act. It applies to numerous types of businesses, such as private limited companies, public limited companies, and so on.

Can Limited Liability Partnerships (LLPs) file ITR-6?

No, LLPs must use ITR-5 to file their tax returns. ITR-6 is only relevant to corporations and does not apply to LLPs.

Who should file ITR-7?

ITR-7 applies to individuals and corporations who are required to file returns under particular parts of the Income Tax Act. It comprises charitable trusts, political parties, institutions, and other specified individuals.

Can individuals file ITR-7 if they have wage or business income?

Individuals who are obligated to file ITR-7 owing to their special circumstances, such as being a member of a political party or a trustee of a charitable trust, can additionally record their wage or business income in this form.

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.
TAXVIC

By TAXVIC

Leave a Reply

Discover more from TAX VIC

Subscribe now to keep reading and get access to the full archive.

Continue reading