Different ITR forms you should know about

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Different ITR forms you should know about

Income Tax Returns (ITRs) are required to be filed by various types of entities – individuals, Hindu Undivided Family (HUF), partnership firms, companies, and other artificial entities like charitable organisations, local authorities, corporate bodies, political parties, etc. 

All these types of taxpayers may be engaged in different types of activities and generate income from one or more of five sources: salary, business or professional income, capital gains, house property income, and income from other sources. Certain entities may be eligible for a different type of reporting altogether due to the nature of their business, or other specified reason. 

Understandably, there are different Income ITR forms meant for reporting of income by different entities across different types of income. Presently, the Income Tax Department has specified seven ITR forms for different kinds of taxpayers. Before we examine the forms, let’s take a quick look at the basic information you will need while filing an ITR.

When is the last date?

  • Taxpayers (including their partners) who are required to get their accounts audited – 31 January 2021.
  • Taxpayers who are required to furnish report international/specific domestic transactions – 31 January 2021.
  • Other taxpayers – 31 December 2020.
Different ITR forms you should know about

ITR-1

ITR-1, also known as the Sahaj form, is a simple one-page form meant for individual assessees. It is meant for people with an income of up to Rs 50 lakhs. 

Who is it meant for?

Individuals with income from:

  1. Salary/pension.
  2. One house property, provided there are no losses brought forward from previous years.
  3. Income from other sources, excluding income from lottery or racehorses.
  4. Clubbed ITR is allowed in ITR-1, provided the clubbed income of the spouse or minor is limited to the aforementioned incomes.
  5. Residents with income up to Rs 50 lakh and income from house property owned jointly can also file ITR-1.

It is NOT meant for...

  1. Individuals with income of over Rs 50 lakh.
  2. An individual who is a director in a company or has held unlisted equity shares at any time during the previous year.
  3. Resident not ordinary residents (RNOR) and non-residents.
  4. Income from business or profession.
  5. Individuals with income from more than one house property.
  6. Individual with a lottery, racehorse, or legal gambling income.
  7. Income from long-term or short-term capital gains.
  8. Agricultural income above Rs 5000.
  9. Residents who have financial interests or assets outside India or is a signing authority in any account outside India.
  10. Individual claiming relief of foreign tax paid or double taxation relief under sections 90/90A/91.

Form walkthrough

The major sections you will find in the ITR-1 form are:

  1. The General Information section, where you fill in personal and form-related information.
  2. Gross Total Income captures your income and the exemptions and deductions that are deducted from this amount.
  3. Deductions and Total Income is the section where you declare your investments, deposits, and payments that are eligible for deductions. After this is filled in your total taxable income is auto-calculated.
  4. Computation of Tax Payable is where tax liability is calculated. Tax payable or refundable is auto-calculated.
  5. Bank details, tax payment information, and investment details round up the remainder of the form.

Related: How to use the new ITR Form?

ITR-2

ITR-2 is meant for individuals and HUFs who meet the eligibility criteria defined for the form. Compared to ITR-1, it is a longer form with over 20 different schedules. That’s because it includes various incomes, carry forward of losses, deductions, tax payments etc. 

Who is it meant for?

Individuals and HUFs with sources of income other than profit and gains from business and profession can file ITR-2. It is meant for:

  1. People with income from salary and pension.
  2. Income from house property, including more than one property.
  3. Both short-term and long-term capital gain or loss, sale of investments, or property.
  4. Income from other sources including income from lottery, racehorses, and legal gambling.
  5. Foreign assets and income.
  6. Agricultural income of more than Rs 5000.
  7. Assessees who are RNOR and non-residents.
  8. Director of a company or individual who has invested in unlisted equity shares of a company.

It is NOT meant for... 

  1. Individuals or HUFs who have income under the head profit or gain from business or profession.
  2. If the individual is eligible to file ITR-1.

Notable information

  • RNORs and non-residents have to file ITR-2 even if total income is less than Rs 50 lakh.
  • ITR-2 should be filed by residents with more than one property and/or the total income of more than Rs 50 lakh.
  • In the case of short- or long-term capital gain, the buyer details must be provided.

Form walkthrough

The major sections you will find in the ITR-2 form are:

  1. The General Information section, where you fill in personal and form-related information.
  2. Computation and details of income under salary, house property, and income from other sources.
  3. Details of current year losses to be carried forward and previous year’s losses brought forward.
  4. Deductions under Chapter VI-A.
  5. Donations under Section 80G and 80GGA.
  6. Computation of Alternate Minimum Tax and Tax Credit under section 115JC and 115JD respectively.
  7. The income of spouse, minor child etc.
  8. Income chargeable to special tax rates.
  9. Details of exempted income.
  10. Income from business trust or investment fund.
  11. Income and tax relief from outside India and summary of tax relief claimed for tax paid outside India.
  12. Details of foreign assets and income from any source outside India.
  13. Apportionment of income applicable under the Portuguese Civil Code.
  14. Details of assets and liabilities.
  15. Details of investments.
  16. Computation of taxable income and tax liability thereon.
  17. Tax payment details.

Related: Types of ITR Forms that every taxpayer should know about

ITR-3

ITR-3 is a separate form for reporting profit and gains from business or profession, which is excluded in ITR-2. Understandably, it’s a longer form as it captures various facets of the assessee’s business and profession.

Who is it meant for? 

  1. Individual and HUF with income from profit and gain from business or profession.
  2. Both tax audit and non-tax audit cases can file ITR-3.
  3. The assessee may also report salary or pension income, income from house property, other sources and capital gains in this return.

It is NOT meant for... 

  1. Assessees who want to pay tax under the presumptive taxation scheme.
  2. Taxpayers who don’t have income from profit and gain from business or profession.

Notable information

  • In the case of short- or long-term capital gains, buyer details must be provided,
  • Deductions under section 80 EEA and EEB are newly included.

Form walkthrough

Here’s a look at the ITR-3 form specs:

  1. The General Information section, where you fill in personal and form-related information, including the audit information if applicable.
  2. Nature of business (maximum of three businesses can be declared).
  3. Balance sheet, manufacturing account, trading account, and profit and loss account. 
  4. Other information.
  5. Quantitative details of the business.
  6. Details of income from all income heads.
  7. Depreciation schedule.
  8. Deemed capital gains, expenditure on scientific research, and capital gains details.
  9. Details of sales attracting securities transaction tax.
  10. Details of current year’s loss, previous years’ brought forward losses, and losses to be carried forward for the future.
  11. Unabsorbed depreciation and allowance under section 35(4).
  12. Effect of Income Computation Disclosure Standards on profit.
  13. Deduction under section 10AA.
  14. Donation details.
  15. Deductions under sections 80-IA to 80-IE.
  16. Deductions under Chapter VI-A.
  17. Computation of Alternate Minimum Tax and Tax Credit under section 115JC and 115JD respectively.
  18. Income of spouse, minor child etc.
  19. Income chargeable to special tax rates.
  20. Partnership firm related information.
  21. Details of exempted income.
  22. Income from business trust or investment fund.
  23. Income and tax relief from outside India and summary of tax relief claimed for tax paid outside India.
  24. Details of foreign assets and income from any source outside India.
  25. Apportionment of income applicable under the Portuguese Civil Code.
  26. Details of assets and liabilities.
  27. Details of investments.
  28. Gross turnover/receipt reported for GST.
  29. Computation of taxable income and tax liability thereon.
  30. Tax payment details.

ITR-4

With presumptive taxation scheme kept out of ITR-3, ITR-4 is used by taxpayers who wish to compute income and tax under this scheme. It is a shorter and much simpler form, particularly when compared to ITR-3. It suits the needs of small businessmen who may not be maintaining their books of accounts with the great detail required under ITR-3.

Who is it meant for? 

  1. ITR-4 can be filed by individuals, HUFs, and partnerships with income from business under section 44AD or 44AE.
  2. Assessee with income from profession under section 44ADA.
  3. Income up to Rs 50 lakh from salary/pension, one house property, other sources (excluding lottery and racehorses).

It is NOT meant for... 

  1. Director of a company or individual who has invested in unlisted equity shares of a company.
  2. If the assessee has Income above Rs 50 lakhs from salary/pension, one house property or other sources.

Notable information

  • In place of the ‘govt’ checkbox, ‘central govt’ and ‘state govt’ checkboxes are introduced. A ‘Not Applicable’ checkbox is introduced against ‘Nature of employment’.
  • There is an option of normal return filing and filing in response to notices.
  • Deductions under section 80 EEA and EEB are newly included.
  • Gross turnover or receipts to include revenue from prescribed electronic payments credited before the specified date.

Form walkthrough

The major sections you will find in the ITR-4 form are:

  1. The General Information section, where you fill in personal and form-related information.
  2. Gross total income.
  3. Tax computation and tax status.
  4. Details of income from business or profession.
  5. Gross turnover or receipt reported under GST.
  6. Financial particulars of the business.
  7. Tax payment and deduction details.
  8. Details of investments.

ITR-5

ITR-5 is meant for various artificial entities and covers all heads of income excluding salaries and pension. Due to the coverage of multiple income sources, ITR-5 is one of the longer ITR forms. 

Who is it meant for? 

ITR-5 can be filed by partnership firms, limited liability partnerships, an association of persons, a body of individuals, cooperative societies, artificial juridical persons, estates of the deceased and insolvent, business trusts, investment funds, and local authority.

It is NOT meant for... 

  1. The eligible entities cannot file ITR-5 if they file their income under sections 139(4A), 139(4B), or 139(4D).
  2. Individuals, HUFs, and companies cannot file ITR-5. 

Notable information

Assessees required to furnish audit report under sections 10AA, 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA(1), 80LA(1A) 92E, 115JB or 115JC have to file such report electronically on or before the date of filing the return of income.

Form walkthrough

While filing ITR-5, you will find the following sections:

  1. The General Information section.
  2. Balance sheet, manufacturing account, trading account, and profit and loss account, and computation of presumptive income.
  3. Other information.
  4. Quantitative details of the business.
  5. Details of income from all income heads.
  6. Depreciation schedule.
  7. Deemed capital gains, expenditure on scientific research and capital gains details.
  8. Details of sales attracting securities transaction tax.
  9. Details of current year’s loss, previous years’ brought forward losses, and losses to be carried forward for the future.
  10. Unabsorbed depreciation and allowance under section 35(4).
  11. Effect of Income Computation Disclosure Standards on profit.
  12. Deduction under section 10AA.
  13. Donation details.
  14. Deductions under sections 80-IA to 80-IE, and 80P.
  15. Deductions under Chapter VI-A.
  16. Computation of Alternate Minimum Tax and Tax Credit under section 115JC and 115JD respectively.
  17. Income chargeable to special tax rates.
  18. Partnership firm related information.
  19. Details of exempted income.
  20. Income from business trust or investment fund.
  21. Details of tax on secondary adjustments.
  22. Income and tax relief from outside India and summary of tax relief claimed for tax paid outside India.
  23. Details of foreign assets and income from any source outside India.
  24. Gross turnover/receipt reported for GST.
  25. Details of investments.
  26. Computation of taxable income and tax liability thereon.
  27. Tax payment details.

Related: 8 Myths about tax filing debunked

ITR-6

ITR-6 is meant for companies, including those companies required to file audit report under section 44AB. Apart from business income, it also captures capital gains, income from house property, and income from other sources.

Who is it meant for? 

  1. Indian/domestic companies.
  2. Body corporate formed by or under laws of other countries.
  3. Any institution, association, or body declared to be a company by its board, whether Indian or non-Indian, incorporated or not.

It is NOT meant for... 

  1. Companies formed for religious or charitable purposes, who claim exemption under Section 11.
  2. Any other entity other than a company.

Notable information

  • You have to disclose if you are declaring income only under sections 44AE / 44B / 44BB / 44AD / 44ADA / 44BBA / 44BBB
  • Income from life insurance business is added to the section ‘Intra head set-off of business loss of current year’.
  • Separate disclosure of bank accounts required for non-residents claiming refund and who don’t have a bank account in India.

Form walkthrough

The important sections you will find in ITR-6 are:

  1. The General Information section.
  2. Balance sheet (with amalgamation and combination sections), manufacturing account, trading account, and profit and loss account.
  3. Other information.
  4. Quantitative details of the business.
  5. Receipt and payment of company under liquidation.
  6. Details of income from all income heads.
  7. Depreciation schedule.
  8. Deemed capital gains, expenditure on scientific research, and capital gains details.
  9. Details of sales attracting securities transaction tax.
  10. Details of current year’s loss, previous years’ brought forward losses, and losses to be carried forward for the future.
  11. Unabsorbed depreciation and allowance under section 35(4).
  12. Effect of Income Computation Disclosure Standards on profit.
  13. Deduction under section 10AA.
  14. Donation details.
  15. Deductions under sections 80-IA to 80-IE.
  16. Deductions under Chapter VI-A.
  17. Income chargeable to special tax rates.
  18. Details of exempted income.
  19. Income from business trust or investment fund.
  20. Computation of Alternate Minimum Tax and Tax Credit under section 115JC and 115JD respectively.
  21. Tax on the distributed profit of Indian companies and its payments, and distributed income on buyback of shares.
  22. Details of tax on secondary adjustments.
  23. Income and tax relief from outside India and summary of tax relief claimed for tax paid outside India.
  24. Details of foreign assets and income from any source outside India.
  25. Shareholding of an unlisted company, and start-ups.
  26. Assets and liabilities details.
  27. Details of investments.
  28. Gross turnover/receipt reported for GST.
  29. Receipts and payments in foreign currency.
  30. Computation of taxable income and tax liability thereon.
  31. Tax payment details.

ITR-7

ITR-7 is filed only by assessees under specific sections of the Income Tax Act. Assessees may include companies as well, provided they fall under the specified sections. It may also be filed by assessees requiring audit under section 44AB. 

Who is it meant for? 

ITR-7 include returns needed to be filed under sections 139(4A/4B/4C/4D/4E/4F), which includes:

  1. Income derived from property held under trust or other legal entity which is formed fully or partly for charitable or religious purposes.
  2. Political parties, scientific research associations, and news agencies.
  3. Association or institution referred under section 10(23A) or 10(23B), university, educational institution, medical institution, college, hospital etc.
  4. Business trust and investment funds.

It is NOT meant for... 

Taxpayers who don’t want to or can’t claim the exemptions provided under the aforementioned subsections of section 139 cannot file ITR-7.

Notable information

  • Four new declarations have been inserted in the section ‘Details of registration or approval under the Income-tax Act’.
  • Separate disclosure of bank accounts required for non-residents claiming refund and who don’t have a bank account in India.

Form walkthrough

The key sections you need to fill in while filing ITR-7 are,

  1. The General Information section.
  2. Details of the amount accumulated or set apart under section 11(2).
  3. Statement of funds and investments.
  4. Details of authors/founders/managers of the trust or institution.
  5. Schedules for political parties and electoral trust.
  6. Voluntary contributions.
  7. Income from sources other than voluntary contributions. 
  8. Revenue expenditures.
  9. Amount applied to charitable or religious purposes.
  10. Income and expenditure statement.
  11. Income from house property, capital gains, and other sources.
  12. Computation of income from business or profession.
  13. Detail of income after set-off of current year’s losses.
  14. Income from business trust or investment fund.
  15. Income chargeable to special tax rates.
  16. Accreted income.
  17. Income and tax relief from outside India and summary of tax relief claimed for tax paid outside India.
  18. Details of foreign assets and income from any source outside India.
  19. Shareholding of an unlisted company.
  20. Statement of income.
  21. Computation of tax liability.
  22. Tax payment details.

ITR-V

ITR-V stands for Income tax return verification. The IT department generates this verification process in cases of e-filing done without digital signature.

 




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