Income Tax Return (ITR) Filing

e-Filing of Income Tax Return - ITR Filing in India

In India, e-Filing of Income tax Return or ITR filing in India is essential for individuals to report their income and taxes to the government. The Income Tax Act of 1961 provides various forms, including ITR-1 (Sahaj) and ITR-2. ITR-1 is simple and meant for salaried individuals earning up to Rs. 50 lakhs annually. On the other hand, ITR-2 is for those with other income sources besides salary, like income from property or abroad, but do not earn from business or professional activities.

In India, individuals and businesses must submit their income tax return when their Gross Total Income (GTI) surpasses Rs. 3 lakhs, as incomes below this threshold are exempt. Submitting these returns is an annual requirement and must be completed by a set deadline. Several types of income tax return forms are designed to cater to the distinct requirements of various categories of taxpayers, including both individuals and corporate entities.

Return Type and Applicability

• ITR-1: ITR-1 form can be used by Individuals who have less than Rs.50 Lakhs of annual income earned by salary or pension and have only one house property.
• ITR-2: ITR-2 forms must be filed by NRIs, directors of companies, shareholders of private companies or those having capital gains income, income from foreign sources, two or more house properties, and income of more than Rs.50 lakhs.
• ITR-3: The ITR-3 form must be filed by professionals or proprietorship business owners in India.
• ITR-4: ITR-4 form can be filed by taxpayers enrolled under the presumptive taxation scheme. To be enrolled for the scheme, the taxpayer must have less than Rs.2 crores of business income or less than Rs.50 lakhs of professional income.
• ITR-5: ITR-5 form must be filed by partnership firms, LLPs, associations and bodies of individuals to report their income and computation of tax.
• ITR-6: ITR-6 form must be filed by companies registered in India.
• ITR-7: ITR-7 form must be filed by entities claiming exemption as charitable/religious trust, political parties, scientific research institutions and colleges or universities.

Individuals, NRIs, partnership firms, LLPs, companies and Trusts must file income tax returns annually. Individuals and NRIs must complete income tax filing if their income exceeds Rs.2.5 lakhs per annum. Proprietorship and partnership firms must make income tax returns irrespective of the amount of income or loss. All companies and LLPs must file income tax returns, irrespective of turnover or profit.

Who Should File a Personal Income Tax Return?

• Salaried Individuals: Those who earn a salary and whose income exceeds the tax-exempt threshold.
• Individuals and Hindu Undivided Families (HUFs): Those not involved in business or professional pursuits but with other sources of income, such as investments, property, or capital gains, that bring their total income above the tax-free limit.

ITR-1 Return Filing Sahaj Form

The ITR-1 Sahaj Form is designed to simplify the tax filing process for individual taxpayers in India, particularly aimed at residents with a total income of less than Rs. 50 lakhs. This form accommodates income from specific sources such as:

• Salary or Pension
• A single-house property
• Other miscellaneous sources

Eligibility for Filing ITR-1

ITR-1 income tax filing is intended for Resident Individuals under the following conditions: the individual's total income during the financial year should be up to Rs. 50 lakh, with income from salary, one house property, family pension (up to Rs. 5,000), and other sources such as interest from savings accounts, deposits, income tax refund interest, interest on enhanced compensation and other interest income. Income can be combined with that of a spouse or minor only if it aligns with the specified categories above.

ITR-2 Return Filing

ITR-2 is used in India by individuals and Hindu Undivided Families (HUFs) with income that does not include profits and gains from business or professional activities. You're eligible to file ITR-2 if you have income from the following sources:

• Salary or Pension: This includes all earnings from employment or post-retirement benefits.
• Multiple House Properties: Income from renting out or owning more than one property.
• Capital Gains: Profits or losses from selling assets like stocks, bonds, or property, covering both long-term and short-term transactions.
• Other Sources: Various incomes such as lottery winnings, bets on racehorses, and other legal gambling earnings.
• Agricultural Income: If you earn more than Rs 5,000 from farming or similar agricultural activities.
• Foreign Income or Assets: If you have earnings from abroad or own assets outside India.
• Residential Status: Suitable for either Resident Not Ordinarily Resident (RNOR) or Non-Residents.
• Directorship: If you hold a directorial position in any company, whether listed or unlisted.

Documents Required for ITR Filing

• Aadhaar Card
• PAN Card
• Bank account details
• Form 16 (salary and TDS information)
• Form 26AS (tax credit statement)
• Receipts for tax exemptions or deductions (if applicable)
• Bank interest statements
• Capital gains statements (for asset sales)
• Documents related to foreign assets and income (if applicable)

Due Date for ITR Filing in India

For personal tax return filing in India, the general deadline for individuals filing ITR-1 and ITR-2, without needing a tax audit, is 31st July of the assessment year that follows the financial year in question.

ITR-3 Return Filing

The ITR 3 Form is crucial for taxpayers earning income from a business or a profession. It can be used for filing an income tax return by individuals or Hindu Undivided Families (HUFs) who are directors of a company or engaged in a business, receiving income from pension, house property, investments in unlisted equity shares, or income taxable under 'profits and gains of business or profession'.

An individual or HUF earning income as a partner of a partnership firm engaged in a business or profession is not eligible to file ITR-3; in such cases, they should file ITR-2 instead.

ITR-4 Return Filing

The ITR-4 Form, commonly referred to as the Sugam form, is specifically designed for taxpayers who have opted for the presumptive income scheme outlined in Section 44AD, Section 44ADA, and Section 44AE of the Income Tax Act. It is designed for individuals, Hindu Undivided Families (HUFs), and firms (excluding Limited Liability Partnerships or LLPs). To qualify, total income should not exceed Rs. 50 lakh, derived from salary/pension, one house property, other sources, and business/profession income computed on a presumptive basis.

ITR-5 Return Filing

The ITR 5 Form is primarily designed for firms, Association of Persons (AOP), and Body of Individuals (BOI) who are not required to file their income tax returns as companies. The following entities can use the ITR 5 Form:

• Firm
• Limited Liability Partnership (LLP)
• Body of Individuals (BOI)
• Association of Persons (AOP)
• Estate of deceased individuals
• Artificial Juridical Person referred to in section 2(31)(vii)
• Business trusts and investment funds
• Estate of insolvent individuals
• Cooperative society
• Local authority

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ITR-6 Return Filing

ITR-6 filing is a crucial annual compliance requirement for corporate entities in India. The Income Tax Return form is specifically designed for companies other than those claiming exemption under section 11 (Income from property held for charitable or religious purposes). Companies registered under the Companies Act or any other applicable law can file the ITR-6 Form, even if they do not claim exemption under section 11.

ITR 6 Due Date

• When accounts are subject to audit under the Income-Tax Act: October 31st of the assessment year.
• When reporting in Form No. 3CEB is required: November 30th of the assessment year.
• In all other cases (where accounts do not require auditing): July 31st of the assessment year.

ITR-7 Return Filing

ITR-7 is a specialized income tax return form designed for specific entities like firms, companies, local authorities, associations of persons (AOPs), and artificial judicial persons claiming exemptions under various sections of the Income Tax Act. It applies to those claiming exemptions in the following categories:

• Under Section 139(4A): Charitable or Religious Trusts
• Under Section 139(4B): Political Parties
• Under Section 139(4C): Scientific Research Institutions
• Under Section 139(4D): Universities, Colleges, Institutions, or Khadi and Village Industries

Filing ITR-7 can be a complex process, but with DigiQore, you can navigate it effortlessly. Our expert team streamlines the ITR-7 filing process, ensuring compliance and accuracy.