What are Different Types of ITR Forms and How They are Applicable?

As per the direct taxation rules, all taxpayers are required to pay a certain amount of tax if their total taxable income exceeds a certain threshold. Paying your taxes is a social and legal obligation, failing which you will have to pay a penalty. 

 

To save yourself from this penalty, you must file your Income Tax Return (ITR) before the stipulated deadline. ITR is a form that details your income, expenses, deductions, applicable tax rate, taxability, and refunds.

 

There are several types of ITR forms a taxpayer must choose based on their category and their income type. So, if you’re wondering, “What are the different types of ITR forms?”, and want to know more about their applicability, read on.

Before learning about the different ITR forms, it is important to know when you need to file this form. 

 

As per the income tax rules, all taxpayers must mandatorily to file an ITR form if any of these conditions is applicable:

• If your total taxable income exceeds the basic exemption limit, which varies depending on your age category 

• The basic exemption limit is ₹2.5 Lakhs for taxpayers below 60 years of age, and ₹3 Lakhs and ₹5 Lakhs for senior citizens between 60 and 80 years and above 80 years, respectively 

• If you have invested or earned from foreign assets 

• If you want to apply for a visa

• If you wish to file a refund from the income tax authorities

• Any firm or company, irrespective of the profit or loss

The Income Tax department has notified 7 types of ITR forms. The applicability of these forms depends on your category as a taxpayer, total taxable income, and source of income. The following are details about each of these various ITR forms: 

ITR 1

ITR 1 or SAHAJ is a return form that resident individuals are required to file. Here are some of the conditions that you must know before filing this form:

• Only those having taxable income of up to ₹50 Lakhs can file this form

• Individuals having their source of income from salary, pension, rent on house property, or other sources need to file ITR 1 

• ITR 1 is required to be filed by those having an agricultural income of up to ₹5,000

ITR 2

ITR 2 forms are applicable to individuals and Hindu Undivided Families (HUFs) subject to any of the following conditions:

• Total taxable income of more than ₹50 Lakhs

• Income under the heads of salary, rent on more than one house property, income from capital gains and other sources

• If an individual is a director in a company or owned unlisted equity shares

• On owning foreign assets or income

• If individuals are resident not ordinarily resident (RNOR) and non-resident

• Having an agricultural income of more than ₹5,000

• If individuals or HUFs have been taxed under Section 194N of the Income Tax Act 

ITR 3

To put it simply, the individuals and HUFs who cannot file ITR 1, ITR 2, and ITR 4, are required to file ITR 3. This form is applicable under these conditions:

• If you run a business or are a professional 

• Income as an individual director of a company

• Income as a partner in a firm

• If you had made any investment in unlisted equity shares in the previous financial year

ITR 4

ITR 4, also called SUGAM, is applicable to both individuals and partnership firms whose total taxable income includes the following:

• Income from salary or pension exceeding ₹50 Lakhs

• Income from rent from house property and other sources (not exceeding ₹50 Lakhs)

• Business and professional income under the presumptive income scheme under Sections 44AD or 44E, and 44ADA, respectively

ITR 5

The following categories are required to file ITR 5 form: 

• Firms

• LLPs (Limited Liability Partnerships)

• BOIs (Body of Individuals)

• AOPs (Association of Persons)

• Artificial Juridical Person (AJP)

• Business trust and investment fund

• Estate of deceased

• Estate of insolvent

ITR 6

For any company that does not claim an exemption under Section 11 of the Income Tax Act can file this return. Note that this form can be filed electronically only.

ITR 7

The ITR 7 is applicable to persons who are required to file returns under Sections 139(4A) to Section 139(4F) of the Income Tax Act of 1961.

Reports point out that the ITR filing process for the assessment year 2022-23 starts from the first week of June. The last date for filing your Income Tax Return will be July 31, 2023. However, the last date for filing ITR for businesses requiring an audit will be October 31, 2023.

 

Section 234A of the Income Tax Act of 1961 provides for charging interest if you fail to file ITR before the due date. As per the Income Tax rules, an interest of 1% per month on the unpaid amount of taxes. 

 

In addition, as per Section 234F, you will have to pay a late fee for delayed filing. The late fee will be ₹5,000 if the total tax liability is more than ₹5 Lakhs and ₹1,000 for lesser amounts.