Income Tax Returns 2023: Last Date for Filing ITR On July 31st, Know Which ITR You Need to Fill

Six forms are available from the Income Tax Department of India for use by both individuals and businesses in filing their income tax returns (ITR). It's crucial to select the correct form to prevent the return from being declared faulty. The form to use depends on the person's income and taxpayer classification.

ITR-1 is for Indian nationals with annual incomes of up to Rs 50 lakh from salaries, family pensions, real estate, or agricultural income of up to Rs 5,000. Lottery or racetrack revenue is not included in this category. Unfortunately, this form cannot be filled out by company directors or anyone who owns shares in unlisted companies.

ITR-2 is for people and Hindu Undivided Families (HUFs) who make more than Rs 50 lakh annually but do not make any money from their businesses. It demands details on multiple residential properties, investment capital gains or losses, dividend income exceeding Rs. 10 lakh, and agricultural income above Rs. 5,000. If the provident fund is receiving interest, the form must also be filled out.

ITR-3 is for people and HUFs who receive business profit distributions. Information from both the ITR-1 and ITR-2 income categories must be provided on this form. A different ITR form must be filled out if a person is a partner in a company. If there is a capital gain from the sale of shares or property or income from interest or dividends, the same form must be completed.

ITR-4, commonly known as Sugam, is used by people, HUFs, and businesses other than Limited Liability Partnerships with a total annual income of more than Rs 50 lakh and who derive their income from sections 44AD, 44ADA, or 44AE. It does not apply to directors of any companies, people who own equity shares, or anybody who make more than Rs 5,000 from agriculture.

While completing an ITR, it is crucial to choose the correct form; otherwise, the Income Tax Department may declare the return to be incomplete. By carefully evaluating their income and tax liability and selecting the appropriate form in accordance, taxpayers can prevent confusion. To avoid a last-minute rush, people and businesses should start getting ready to file their ITRs as the new fiscal year draws near.

ITR-5 is for limited liability partnerships, groups of people, bodies of people, artificial juridical persons, cooperative societies, and municipal governments.

ITR-6 is for businesses that have not requested an exemption under Section 11, where income from assets held in trust for charitable purposes is exempt from taxation.