Which ITR Should I File

Filing your Income Tax Return (ITR) is a crucial responsibility for every taxpayer in India. Selecting the correct ITR form ensures that your income is reported accurately, helping you comply with tax regulations and avoid unnecessary complications. With multiple ITR forms available, it is essential to understand which one applies to you. This guide will walk you through the different types of ITR forms, their eligibility criteria, and filing considerations for the Financial Year (FY) 2024-25 (Assessment Year 2025-26).

Income Tax Return (ITR) forms are documents prescribed by the Income Tax Department of India for taxpayers to report their income, claim deductions, and calculate tax liabilities. Each form is tailored to specific types of taxpayers and income sources, ensuring accurate reporting and compliance with tax laws. Selecting the right ITR form depends on your income type, residential status, and other factors.

The Income Tax Department has introduced seven ITR forms, each catering to different categories of taxpayers. Below is a detailed breakdown of each form, its eligibility, and exclusions:

ITR 1 or SAHAJ for FY 2024-25

Who can file ITR 1?

• Resident individuals with total income up to Rs. 50 lakh.
• Income sources include salary, pension, one house property, and other sources (excluding winnings from lottery or racehorses).
• Agricultural income up to Rs. 5,000.

Who cannot file ITR 1 (SAHAJ)?

• Non-residents and Hindu Undivided Families (HUFs).
• Individuals with income exceeding Rs. 50 lakh.
• Income from more than one house property or capital gains.
• Business or professional income.

ITR 2 for FY 2024-25

Who can file ITR 2?

• Individuals and HUFs not having income from business or profession.
• Income includes salary, pension, multiple house properties, capital gains, and other sources.

Who cannot file ITR 2?

• Individuals with income from business or profession.

ITR 3 for FY 2024-25

Who can file ITR 3?

• Individuals and HUFs earning income from a proprietary business or profession.
• Income sources include salary, house property, capital gains, and other sources.

Who cannot file ITR 3?

• Taxpayers who are eligible to file ITR 1, ITR 2, or ITR 4.

ITR 4 or Sugam for FY 2024-25

Who can file ITR 4?

• Resident individuals, HUFs, and firms (excluding LLPs) with total income up to Rs. 50 lakh.
• Income from business or profession under the presumptive taxation scheme.

Who cannot file ITR 4 (Sugam)?

• Individuals with income exceeding Rs. 50 lakh.
• Non-residents, directors in a company, or those holding unlisted equity shares.

ITR-5

Who can file ITR 5?

• Firms, LLPs, Association of Persons (AOPs), Body of Individuals (BOIs), and artificial juridical persons.

Who cannot file ITR 5?

• Individuals, HUFs, and companies required to file ITR 6 or ITR 7.

ITR-6

Who can file ITR 6?

• Companies other than those claiming exemption under Section 11 (income from property held for charitable or religious purposes).

Who cannot file ITR 6?

• Companies eligible for exemption under Section 11.

ITR-7

Who can file ITR 7?

• Entities required to furnish returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D), such as trusts, political parties, and educational institutions.

Who cannot file ITR 7?

• Individuals, HUFs, and companies not covered under the above sections.

Filing the wrong ITR form can lead to delays in processing your return, rejection of the filing, or penalties. It may also result in mismatches in income reporting, which could trigger scrutiny by the Income Tax Department. To avoid such issues, ensure you understand the eligibility criteria for each form before filing.

Filing an ITR is mandatory for:

• Individuals with gross total income exceeding the basic exemption limit.
• Businesses and professionals earning income.
• Individuals wishing to claim refunds or carry forward losses.
• Residents with foreign assets or income.

Filing your ITR is not just a legal obligation but also offers several benefits:

• Claiming refunds: If excess tax has been deducted, filing ITR helps you claim a refund.
• Carrying forward losses: Unclaimed losses can be carried forward for future tax benefits.
• Loan approvals: ITR serves as proof of income for loans and credit applications.
• Compliance: Timely filing ensures adherence to tax laws and avoids penalties.

To download the ITR form utility, follow these steps:

1. Visit the official Income Tax Department website (www.incometax.gov.in).
2. Navigate to the “Downloads” section.
3. Select the appropriate ITR form based on your eligibility.
4. Download the utility in Excel or Java format.
5. Fill in the required details and upload the form as per instructions.

Here is a summary of the available ITR forms and their corresponding taxpayer categories:

• ITR 1: Salaried individuals with simple income sources.
• ITR 2: Individuals with capital gains or multiple house properties.
• ITR 3: Business or professional income.
• ITR 4: Presumptive taxation scheme.
• ITR 5: Firms, LLPs, and AOPs.
• ITR 6: Companies (other than exempt entities).
• ITR 7: Trusts, political parties, and educational institutions.

The ITR form you need to file depends on your income type and eligibility. For instance, salaried individuals with income up to Rs. 50 lakh can file ITR 1, while those with business income should opt for ITR 3 or ITR 4. Refer to the detailed eligibility criteria mentioned above to determine the right form for your situation.

Filing the correct ITR form is critical for accurate tax reporting and compliance. Whether you are a salaried individual, self-employed professional, or business owner, understanding the eligibility criteria for different forms ensures a hassle-free filing experience. Take the time to evaluate your income sources and financial situation before selecting the appropriate form.