Income Tax Returns (ITRs) are mandatory for individuals and businesses earning above a certain threshold. The Indian Income Tax Department provides different ITR forms, each designed for specific categories of taxpayers. Filing the correct ITR form is crucial for tax compliance and avoiding penalties.

This guide explains the different ITR forms, their eligibility criteria, and which one you should file.

Why Are There Multiple ITR Forms?

The Income Tax Act of India defines various sources of income, such as salary, business profits, capital gains, and foreign earnings. Since taxpayers have different types of income, a single ITR form cannot cover all cases.

To simplify the filing process, the government has categorized taxpayers and assigned different ITR forms based on:

Source of income (salary, business, investments, etc.)
Taxpayer category (individual, HUF, company, firm, etc.)
Income level (below or above ₹50 lakh, foreign income, etc.)

List of ITR Forms and Their Applicability

The Income Tax Department currently has seven ITR forms, ranging from ITR-1 to ITR-7.

1. ITR-1 (Sahaj) – For Salaried Individuals

Who Can File?

• Individuals with salary, pension, or interest income.
• Total income less than ₹50 lakh.
• Income from one house property (except carry-forward loss).

Who Cannot File?

• If you have capital gains, business income, or foreign income.
• If you own more than one house property.

Example: A software engineer earning ₹12 lakh annually with bank interest income should file ITR-1.

2. ITR-2 – For Individuals & HUFs Without Business Income

Who Can File?

• Individuals or Hindu Undivided Families (HUFs).
• Income from salary, house property, capital gains, or foreign income.
• Income above ₹50 lakh.

Who Cannot File?

• If you have income from business or profession.

Example: A retired government employee earning pension and capital gains from stocks should file ITR-2.

3. ITR-3 – For Individuals & HUFs with Business/Professional Income

Who Can File?

• Individuals and HUFs running a business or profession.
• Directors of a company or partners in a firm.
• Freelancers and self-employed individuals.

Example: A chartered accountant with business income of ₹30 lakh should file ITR-3.

4. ITR-4 (Sugam) – For Small Businesses & Professionals Under Presumptive Taxation

Who Can File?

• Individuals, HUFs, and firms with business income under Section 44AD, 44ADA, or 44AE.
• Income up to ₹50 lakh.

Who Cannot File?

• Companies, LLPs, and taxpayers with foreign income.

Example: A shop owner earning ₹25 lakh per year under presumptive taxation should file ITR-4.

5. ITR-5 – For Partnership Firms, LLPs, AOPs & BOIs

Who Can File?

• Partnership firms, LLPs, Associations of Persons (AOPs), and Bodies of Individuals (BOIs).
• Business entities except companies.

Example: A LLP engaged in a trading business should file ITR-5.

6. ITR-6 – For Companies (Other Than Section 8 Companies)

Who Can File?

• Private limited companies, public limited companies, and startups.

Who Cannot File?

• Section 8 companies (Non-Profit Organizations) should file ITR-7.

Example: A software development company with annual revenue of ₹5 crore should file ITR-6.

7. ITR-7 – For Trusts, NGOs, and Political Parties

Who Can File?

• Charitable trusts, political parties, religious institutions, NGOs, and educational institutions claiming exemptions under Sections 139(4A), 139(4B), 139(4C), or 139(4D).

Example: A registered charitable trust collecting donations should file ITR-7.

Which ITR Form Should You File? – Quick Summary

Mistakes to Avoid While Choosing an ITR Form

Filing ITR-1 when you have capital gains.
Filing ITR-4 when you own multiple house properties.
Not disclosing foreign assets in ITR-2.
Using ITR-3 instead of ITR-5 for a partnership firm.

Choosing the wrong ITR form can lead to notice from the Income Tax Department and rejection of your return.

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