The Income Tax Return, or ITR, is a mechanism that taxpayers use to provide reports to the IRS about their earnings and tax payments. A taxpayer must register his or her ITR on or before the deadline.
Before filing an ITR, any taxpayer can assess their tax liability and make payments. For instance, in the event of a failure carryforward and setoff of brought-over losses, you can file an ITR. Check form 26AS for information on TDS and other taxes, such as FD interest, while filing your ITR. You’ll just use your Form 16 to fill out the particulars of your income and tax-saving deduction statements.
Importance of filing an ITR
- If individuals seek to obtain a refund from the Income Tax Department.
- If individuals intend to apply for a loan or a visa.
- If individuals have multiple income sources, such as capital gains or house property.
- If individuals have earned income from foreign assets in the financial year.
- For companies or firms, regardless of profit or loss.
Types of ITR
ITR 1
Individuals residing in India with a total income of up to Rs 50 lakh are eligible. ITR-1 may be filed by someone who earns money from a job, a home, or other outlets. An NRI is unable to file an ITR-1. ITRs may be filed using Form 16 by salaried taxpayers.
ITR 2
Individuals and HUF for revenue from sources other than their enterprise or occupation. Individuals and NRIs who earn money from a job, a home, capital gains, or other sources may file Form ITR-2.
ITR-2 may be filed by salaried people who have made profits or damages from stock purchases and sales.
ITR 3
Individuals are required to disclose their earnings from a company or occupation. Salaried people who earn money from the intraday stock exchange or futures and options trading should file Form ITR-3.
Individuals may use ITR-3 to record revenue from jobs, real estate, capital gains, company or trade (including presumptive income), and other sources.
ITR 4
Individuals, HUFs, and partnership companies are subject to a presumptive taxation system on their earnings. ITR-4 is used to report revenue from a company with a turnover of up to Rs 2 crore that is subject to section 44AD taxation.
In addition, ITR-4 is for revenue from an occupation with a turnover of up to Rs 50 lakh that is subject to section 44ADA taxation. ITR-4 may be filed by a freelancer who works in a notified occupation.
ITR 5
LLP, AOP, and BOI are both acronyms for alliance companies. LLPs, partnership companies, AOPs, and BOIs will file ITR-5s to disclose profits from their businesses and professions, as well as some other sources of income.
ITR 6
It is an income tax return form used by businesses to report revenue from industry or occupation, as well as all other forms of income.
ITR 7
It is the federal tax return for businesses, partnerships, and trusts that continue to be excluded from paying income tax.
Types of Forms to File ITR
Form 16
An employee gets a Form 16 TDS certificate from their boss. The gross pay, as well as exemptions such as HRA and LTA, are listed on Form 16.
The form also includes information on the employee’s net taxable pay, all other revenue or loss reported tax-saving deductions and salary TDS.
Form 26AS
The tax deducted at source (TDS) on different earnings, such as wages, debt, and the selling of immovable property, is detailed on Form 26AS. Details of self-assessment tax, advance tax paid by an individual, and listed financial transactions are also included on the form.
Form 15G and Form 15H
You will earn income without TDS using Form 15G and Form 15H. If you are under the age of 60 and your gross taxable income is less than the basic exemption cap, you can file a Form 15G.
If you are a senior citizen and the tax owed on your net salary is zero, you will file Form 15H. To the individual who pays your taxes, you must apply Form 15G or Form 15H.
FAQs
Which ITR form to fill for self-employed?
For self-employed individuals, one must fill in either ITR-3 or ITR-4 form
How many types of ITR are there?
There are 7 types of Income tax return forms in India.