ITR filing: Find out which form is for you?

The Income Tax (I-T) department has notified 7 forms for filing ITR (Income Tax Return) this year, the deadline for which will end on December 31, 2020. These forms include Sahaj (ITR-1), Form ITR-2, Form ITR-3, Form Sugam (ITR-4), Form ITR-5, Form ITR-6 and Form ITR-7.

These tax forms are applicable for the assessment year 2020-21, which means they relate to income earned in the financial year 2019-20.

Different ITR forms are available for different purposes. One should be careful while choosing the ITR form. A wrong form can render the tax return filed defective and the taxpayer may receive a notice to file the return once again, experts say.

ITR 1, also known as Sahaj, is available for individuals who are residents having total income up to Rs 50 lakh, having income from salaries, one house property, other sources (interest, etc.), and agricultural income up to Rs 5,000.

According to Taxmann, if the income of another person (spouse, minor child, etc.) has to be clubbed with the income of the assessee, return in ITR 1 can be filed only when such income falls in any of the mentioned categories. However, if tax has been deducted in the name of such other person and the assessee wishes to claim its credit, then he/she cannot file a return in ITR 1.

There is more exclusion to filing ITR 1.

Like, individuals who qualify to be residents but are not ordinarily resident or non-resident or have income from capital gains or have more than one house property are also not permitted to use Form 1. Further, it may be noted that individual who is either director in a company or has invested in unlisted equity shares would not be eligible to use this tax return form.

ITR-2 is available for individuals and HUFs (Hindu Undivided Families) not carrying out business or profession under any proprietorship.

Return in ITR 2 cannot be filed by an individual or HUF if he/it has income chargeable to tax under the head 'Profit or gains from business or profession' or he wants to claim deduction under Section 10AA or Part-C of Chapter VI-A.

ITR-3 is available for individuals and HUFs having income from profits and gains in business or profession.

ITR-4, also known as Sugam, is available for individuals, HUFs and firms (other than LLP) being a resident having a total income up to Rs 50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE under Income Tax Act. LLP or limited liability partnership is a partnership in which some or all partners have limited liabilities.

However, if tax has been deducted in the name of such other person and the assessee wants to claim its credit, then he/she cannot file a return in ITR-4,

ITR-5 is available for persons other than an individual, HUF, company and person filing Form ITR-7.

ITR-6 is available for companies other than companies claiming exemption under section 11 of the Income Tax Act.

ITR-7 is available for persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only under Income Tax Act.

Additionally, ITR-V is available for verification. ITR-V is received when taxpayers file their I-T return online—without using a digital signature.