Income Tax Return : What is ITR, Types of ITR and ITR Form Names

If you’re new to Income Tax Return; would be filing ITR in 2018 for the first time and you’re bogged down by questions like:

  1. What is ITR or what is income tax return filing
  2. What are the types of ITR
  3. Which ITR to file
  4. What are the different ITR form names
  5. what is itr 4s, what is itr 1 or what is itr v

then this article is surely going to help you, as this article will discuss what is ITR, types of ITR and which ITR you need to file, their eligibility, requirements and major changes with respect to the previous financial year and also ITR form names.

Who all need to file an Income Tax Return

As per the income tax act of 1961, every individual or company, who’s annual income is above the maximum level which is not chargeable to income tax, is required to file an Income Tax Return. This income tax return has to be filed in a specific, prescribed manner and has to be verified by the prescribed manner.

With respect to the above, the Income Tax Department, has laid out some ground rules and have categorised different types of returns depending on various conditions. These are different categories of Income Tax Return (ITR) forms for different types of taxpayers.

The ITR forms can be classified into two categories, those applicable to individuals and those applicable to firms and companies. As per the Central Board of Direct taxes, Form ITR 1, ITR 2, ITR 2A, ITR 3, ITR 4 and ITR 4S are applicable in case of individuals. Similarly, ITR 5, ITR 6 and ITR 7 are applicable to non-individuals.

What is ITR/Income Tax Return?

An Income Tax return/ITR is the form where all eligible taxpayers are required to declare the taxable income, deductions and tax payments. In the ITR Form taxpayers need to declare all information under various heads to the best of their knowledge. The process of submitting the information is knowing as ITR Filing. ITR filing is also the closure of financial year for the individuals. ITR Filing is done in the good faith and therefore each and every ITR is not scrutinized by IT Department. ITR filing also helps taxpayers to recover excess tax paid by them to IT department.

Types of Income Tax Returns:

ITR1 Sahaj Form:

ITR 1 Form is also known as SAHAJ Form. The form is applicable only for individuals. Any other person whose income is taxable shall not be eligible to file its return in this form.

Eligibility:

ITR -1 Form is a simplified one page form for individuals having income up to INR 50 lakhs from the following sources :

  • Income from Salary/Pension
  • Income from One House Property (excluding cases where loss is brought forward from previous years)
  • Income from Other Sources (excluding winning from Lottery and Income from Race Horses)

In case of clubbed Income Tax Returns, where a spouse or a minor is included, this can be done only if their income too is limited to the above specifications.

Not eligible for:

Individuals having income above INR 50 lakhs cannot use this form.

Also individuals who have earned Income through the following means are not eligible to file form ITR 1 :

  • more than one House Property
  • Lottery, Racehorses, Legal Gambling etc.
  • taxable capital gains (Short term and Long term)
  • agricultural income exceeding INR 5,000
  • Business and Profession
  • Individual who is a Resident and has
    • assets (including financial interest in any entity) outside India or
    • signing authority in any account located outside India.
  • Individual claiming relief of foreign tax paid or double taxation relief under section 90/90A/91.

Major Changes in the ITR 1 for the AY 2018-19:

  1. Earlier ITR-1 was applicable for both Residents, Residents Not ordinarily resident (RNOR) and also Non-residents. Now this from has been made applicable only for resident individuals.
  2. The condition of the individual having income from salaries, one house property, other income and having total income up to INR 50 lakhs continues.
  3. There is a requirement to furnish a break-up of salary. Until now, these details would appear only in Form 16 and the requirement to disclose them in the return had never arisen.
  4. There is also a requirement to furnish a break up of Income under House Property which was earlier mandatory only for ITR -2 and other forms.

In case the income of the spouse or minor child is to be clubbed in the income of individual, he/she can file return in ITR 1 if such income to be clubbed falls under the above applicable criteria.

ITR 2:

This Return Form is to be used by an individual or an Hindu Undivided Family who is not eligible to file Sahaj ITR-1 and whose income chargeable to income tax under the head “Profits or gains of business or profession” is in the nature of interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from a partnership firm.

Eligibility:

ITR Form 2 is for Individuals and HUF receiving income other than income from “Profits and Gains from Business or Profession”. Thus Persons having income from following sources are eligible to file Form ITR 2 :

  • Income from Salary/Pension
  • Income from House Property(Income Can be from more than one house property)
  • Income from Capital Gains/loss on sale of investments/property (Both Short Term and Long Term)
  • Income from Other Sources (including winning from Lottery, bets on Race Horses and other legal means of gambling)
  • Foreign Assets/Foreign Income
  • Agricultural Income more than INR 5000
  • Resident not ordinarily resident and a Non resident

Not eligible for:

This Return Form should not be used by an individual whose total income includes Income from Business or Profession under any proprietorship.

In addition:

  • Any individual or HUF having income from Business or Profession
  • Individuals who are eligible to fill out the ITR-1 Form

Major Changes in the ITR 2 for the AY 2018-19:

  1. Given that ITR-1 is not applicable for the RNORs and the non-residents, they have to necessarily go with ITR-2 for filing their return of income
  2. The applicability of ITR-2 has been made more clear in as much as now it is applicable for individuals and HUF having income other than income under the head “Profits and Gains from Business or Profession”
  3. The field of “Profits and Gains from Business or Profession” which was earlier featuring under Part B – TI has now been removed.
  4. Following this, Schedule-IF (Income from Firm) and Schedule-BP have also been removed. This now means, anyone earning income from a partnership firm, now has to file ITR-3 and not ITR -2
  5. Additionally, under Schedule AL, the field pertaining to “Interest held in the assets of a firm or association of persons (AOP) as a partner or member thereof” has been done away with

ITR 3:

This Return Form is to be used by an individual or a Hindu Undivided Family who is carrying out a proprietary business or profession.

Eligibility:

The ITR 3 is applicable for individual and HUF who have income from profits and gains from business or profession. The persons having income from following sources are eligible to file ITR 3 :

  • Carrying on a business or profession
  • Return may include income from House property, Salary/Pension and Income from other sources.

Major Changes in the ITR 2 for the AY 2018-19:

  1. The general information tab an option to select section 115H (who is a non-resident Indian in any previous year, becomes assessable as resident in India in respect of the total income of any subsequent year) has been added.
  2. In the Profit and Loss schedule, the GST related details have been added
  3. Limitation of maximum 40% depreciation in all depreciation related Schedules
  4. Partners of partnership firms as against ITR 2 will have to file their returns in ITR 3

ITR-4S Sugam Form:

The Sugam ITR-4S Form is the Income Tax Return form for those taxpayers who have opted for the presumptive income scheme as per Section 44AD and Section 44AE of the Income Tax Act. However, if the turnover of the business mentioned above exceeds INR 2 crores, the tax payer will have to file ITR-4.

Eligibility:

This Return Form is to be used by an individual/ HUF/ Partnership Firm whose total income for the assessment year 2017-18 includes:-

(a) Business income where such income is computed in accordance with special provisions referred to in sections 44AD and 44AE of the Act for computation of business income; or

(b) Income from Profession where such income is computed in accordance with special provisions referred to in sections 44ADA; or

(c) Salary/ Pension; or

(d) Income from One House Property (excluding cases where loss is brought forward from previous years); or

(e) Income from Other Sources (excluding Winning from Lottery and Income from Race Horses).

Note 1: The income computed shall be presumed to have been computed after giving full effect to every loss, allowance, depreciation or deduction under the Income-tax Act.

Note 2: Further, in a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this Return Form can be used only if the income being clubbed falls into the above income categories.

Not eligible for:

SUGAM cannot be used in following cases

(a) Income from more than one house property; or

(b) Income from Winnings from lottery or income from Race horses; or

(c) Income under the head “Capital Gains”, e.g. Short-term capital gains or long-term capital gains from sale of house, plot, shares etc.; or

(d) Income taxable under section 115BBDA; or

(e) Income of the nature referred to in section 115BBE; or

(f) Agricultural income in excess of INR 5,000; or

(g) Income from Speculative Business and other special incomes; or

(h) Income from an agency business or income in the nature of commission or brokerage; or

(i) Person claiming relief of foreign tax paid under section 90, 90A or 91; or

(j) Any resident having any asset (including financial interest in any entity) located outside India or signing authority in any account located outside India; or

(k) Any resident having income from any source outside India.

ITR 5:

ITR-5 has to be filed by firms, Limited Liability Partnerships (LLPs), Association of Persons (AOP) and Body of Individuals (BOI).

Eligibility:

This Form can be used by a person being a firm, LLPs, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), persons referred to in section 160(1)(iii) or (iv), cooperative society, registered societies and local authority.

However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4F) shall not use this form.

ITR 6:

Companies other than companies claiming exemption under section 11 must furnish their income tax must in ITR-6 Form.

Companies claiming exemption under section 11 are those whose income from property is held for charitable or religious purposes.

ITR 7:

ITR-7 is filed when persons including companies fall under section 139(4A) or section 139 (4B) or section 139 (4C) or section 139 4(D).

Eligibility:

  • Return under section 139(4A) is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.
  • Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount which is not chargeable to income-tax.
  • Return under section 139(4C) is required to be filed by every
    • scientific research association ;
    • news agency ;
    • association or institution referred to in section 10(23A);
    • institution referred to in section 10(23B);
    • fund or institution or university or other educational institution or any hospital or other medical institution.
  • Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section.

Summary of Types of Income Tax Returns:

ITR Number Eligibility Not Eligible for Changes for AY 2018-2019
ITR1 Sahaj Form ITR -1 Form is a simplified one page form for individuals having income up to INR 50 lakhs from the following sources Individuals having income above INR 50 lakhs cannot use this form. 1. Earlier ITR-1 was applicable for both Residents, Residents Not ordinarily resident (RNOR) and also Non-residents. Now this from has been made applicable only for resident individuals.
Income from Salary/Pension Also individuals who have earned Income through the following means are not eligible to file form ITR 1 2. The condition of the individual having income from salaries, one house property, other income and having total income up to INR 50 lakhs continues.
Income from One House Property (excluding cases where loss is brought forward from previous years) more than one House Property 3. There is a requirement to furnish a break-up of salary. Until now, these details would appear only in Form 16 and the requirement to disclose them in the return had never arisen.
Income from Other Sources (excluding winning from Lottery and Income from Race Horses) Lottery, Racehorses, Legal Gambling etc. 4. There is also a requirement to furnish a break up of Income under House Property which was earlier mandatory only for ITR -2 and other forms.
In case of clubbed Income Tax Returns, where a spouse or a minor is included, this can be done only if their income too is limited to the above specifications. taxable capital gains (Short term and Long term)
agricultural income exceeding INR 5,000
Business and Profession
Individual who is a Resident and has
assets (including financial interest in any entity) outside India or
signing authority in any account located outside India.
Individual claiming relief of foreign tax paid or double taxation relief under section 90/90A/91.
ITR 2 ITR Form 2 is for Individuals and HUF receiving income other than income from “Profits and Gains from Business or Profession”. Thus Persons having income from following sources are eligible to file Form ITR 2 This Return Form should not be used by an individual whose total income includes Income from Business or Profession under any proprietorship. 1. Given that ITR-1 is not applicable for the RNORs and the non-residents, they have to necessarily go with ITR-2 for filing their return of income
Income from Salary/Pension Any individual or HUF having income from Business or Profession 2. The applicability of ITR-2 has been made more clear in as much as now it is applicable for individuals and HUF having income other than income under the head “Profits and Gains from Business or Profession”
Income from House Property(Income Can be from more than one house property) Individuals who are eligible to fill out the ITR-1 Form 3. The field of “Profits and Gains from Business or Profession” which was earlier featuring under Part B – TI has now been removed.
Income from Capital Gains/loss on sale of investments/property (Both Short Term and Long Term) 4. Following this, Schedule-IF (Income from Firm) and Schedule-BP have also been removed. This now means, anyone earning income from a partnership firm, now has to file ITR-3 and not ITR -2
Income from Other Sources (including winning from Lottery, bets on Race Horses and other legal means of gambling) 5. Additionally, under Schedule AL, the field pertaining to “Interest held in the assets of a firm or association of persons (AOP) as a partner or member thereof” has been done away with
Foreign Assets/Foreign Income
Agricultural Income more than INR 5000
Resident not ordinarily resident and a Non resident
ITR 3 The ITR 3 is applicable for individual and HUF who have income from profits and gains from business or profession. The persons having income from following sources are eligible to file ITR 3 : 1. The general information tab an option to select section 115H (who is a non-resident Indian in any previous year, becomes assessable as resident in India in respect of the total income of any subsequent year) has been added.
2. In the Profit and Loss schedule, the GST related details have been added
Carrying on a business or profession 3. Limitation of maximum 40% depreciation in all depreciation related Schedules
Return may include income from House property, Salary/Pension and Income from other sources. 4. Partners of partnership firms as against ITR 2 will have to file their returns in ITR 3
ITR-4S Sugam Form This Return Form is to be used by an individual/ HUF/ Partnership Firm whose total income for the assessment year 2017-18 includes:- SUGAM cannot be used in following cases
(a) Business income where such income is computed in accordance with special provisions referred to in sections 44AD and 44AE of the Act for computation of business income; or (a) Income from more than one house property; or
(b) Income from Profession where such income is computed in accordance with special provisions referred to in sections 44ADA; or (b) Income from Winnings from lottery or income from Race horses; or
(c) Salary/ Pension; or (c) Income under the head “Capital Gains”, e.g. Short-term capital gains or long-term capital gains from sale of house, plot, shares etc.; or
(d) Income from One House Property (excluding cases where loss is brought forward from previous years); or (d) Income taxable under section 115BBDA; or
(e) Income from Other Sources (excluding Winning from Lottery and Income from Race Horses). (e) Income of the nature referred to in section 115BBE; or
Note 1: The income computed shall be presumed to have been computed after giving full effect to every loss, allowance, depreciation or deduction under the Income-tax Act. (f) Agricultural income in excess of INR 5,000; or
Note 2: Further, in a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this Return Form can be used only if the income being clubbed falls into the above income categories. (g) Income from Speculative Business and other special incomes; or
(h) Income from an agency business or income in the nature of commission or brokerage; or
(i) Person claiming relief of foreign tax paid under section 90, 90A or 91; or
(j) Any resident having any asset (including financial interest in any entity) located outside India or signing authority in any account located outside India; or
(k) Any resident having income from any source outside India.
ITR 5 This Form can be used by a person being a firm, LLPs, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), persons referred to in section 160(1)(iii) or (iv), cooperative society, registered societies and local authority. a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4F) shall not use this form.
ITR 6 Companies other than companies claiming exemption under section 11 must furnish their income tax must in ITR-6 Form.
ITR 7 Return under section 139(4A) is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.
Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount which is not chargeable to income-tax.
Return under section 139(4C) is required to be filed by every
scientific research association ;
news agency ;
association or institution referred to in section 10(23A);
institution referred to in section 10(23B);
fund or institution or university or other educational institution or any hospital or other medical institution.
Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section.

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2 Comments

  1. Elias Lancy Pinto

    Greetings…….Being a new comer to file my IT Returns for April 2017 to March 2018, been advised by my CA requesting a certificate from my broker SAMCO to file IT.
    Henc appreciate if the needful is obliged please.
    Details: Client ID # DE22042
    Name Elias Lancy Pinto

    1. Greetings Mr. Elias, Thank you for getting in touch with us. We hope our accounting department were able to resolve your queries. In case you have any questions or need any help, email us at Support@samco.in or can raise a ticket on https://www.samco.in/support , or contact us on the following numbers + 91 22 2222 7777 , +91 22 6169 9000; our Executive will resolve your query.
      Thank you for your time. Have a great day!

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