INCOME TAX RETURN
WHAT IS INCOME TAX RETURN?
An income tax return is a form where taxpayers declare their taxable income, deductions, and tax payments. This procedure of filing income tax returns is referred to as income tax filing. While filing the actuals, the total amount that should go to the government as income tax is calculated. If you’ve paid more tax than needed for the financial year, you’ll be refunded by the income tax department. Sometimes, you may also see that you have underpaid taxes for the year. In such cases, you must pay the remainder of the tax, and file your income tax returns.
Income tax return form ranges from ITR 1 to ITR 7, used for different types of income. Some income tax return forms are longer than the others, and they may need additional disclosures such balance sheet and a profit and loss statement information.
DETAILS NEEDED WHEN E-FILING INCOME TAX RETURNS
- You'll need to produce basic information such as PAN, Aadhar card number, and current address.
- Details about your income from salary, fixed deposits, savings bank account, etc.
- Information of all the deductions you've claimed under Section 80.
- You'll also need to produce tax payment information such as TDS and advance tax payments.
- Details about all the bank accounts you've held in the given financial year. This is a mandatory disclosure you must make for e filing your income tax returns.
WHICH INCOME TAX RETURN (ITR) SHOULD I FILE?
There are nine forms – ITR 1, 2, 2A, 3, 4, 4S, 5, 6 and 7 for each type of tax situation. Honestly, choosing the correct income tax form is a lot of work. Which is why if you choose us, we automatically decide the correct income tax return form and file it for you.
The following will help you find out which type of income tax return is applicable to you.
This Return Form is to be used by an individual whose total income for the assessment year 2018-19 includes:-
- Income from Salary/ Pension; or
- Income from One House Property (excluding cases where loss is brought forward from previous years); or
- Income from Other Sources (excluding Winning from Lottery and Income from Race Horses)
Who cannot use ITR-1 Form?
- If your total income exceeds Rs 50 lakhs.
- If you have foreign assets
- If you have agricultural income which is more than Rs. 5,000,
- If you have taxable capital gains
- If you have income from business or profession
- If you have income from more than one house property
ITR-2 is to be used by an individual or a Hindu Undivided Family whose total income for the AY 2018-19 includes:-
- Income from Salary/Pension; or
- Income from House Property; or
- Income from Other Sources (including Winnings from Lottery and Income from Race Horses).
(Total income from the above should be more than Rs 50 Lakhs)
- Income from Capital Gains; or
- Income of a person as a partner in the firm
- Foreign Assets/Foreign income
- Agricultural income more than Rs 5,000
Further, in a case where the income of another person like one’s spouse, child, etc. is to be clubbed with the income of the assessee, this Return Form can be used where such income falls in any of the above categories.
Who cannot use ITR-2 Form?
This Return Form should not be used by an individual whose total income for the AY 2018-19 includes Income from Business or Profession .
The Current ITR-3 Form is to be used by an individual or an Hindu Undivided Family who have income from proprietary business or are carrying on 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
The ITR-4 Form is the Income Tax Return form for those taxpayers, who have opted for the presumptive income scheme as per Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act. However, if the turnover of the business mentioned above exceeds Rs 2 crores, the taxpayer will have to file ITR-3.
Who is required to file ITR-4?
ITR-4 is to be filed by the individuals/HUF/ partnership firm whose total income of AY 2018-19 includes :
- Business income under section 44AD or 44AE
- Income from profession calculated under section 44ADA
- Salary/pension
- Income from One House Property (excluding the brought forward loss or loss to be carried forward cases under this head);
- Income from Other Sources (Excluding winning from lottery and income from horse races).
Note : Freelancers engaged in the above profession can also opt for this scheme if their gross receipts don’t exceed Rs 50 lakhs.
This income tax return is meant for firms, LLPs, AOPs (Association of persons) and BOIs (Body of Individuals).
Who is required to file ITR-5?
This form can be used a person being a firm, LLPs, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), cooperative society 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) shall not use this form.
Companies other than companies claiming exemption under section 11(whose income from property is held for charitable or religious purposes) must furnish their income tax must in ITR-6 Form.
ITR-7 is to be filed by persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D).
- 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.