Monday, 24 August 2015

What are the forms of return prescribed under the Income-tax Law?

Under the Income-tax Law, different forms of returns are prescribed for different classes of taxpayers. The return forms are known as ITR forms (Income Tax Return Forms). The forms of return prescribed under the Income-tax Law for filing of return of income for the assessment year 2014-15 (i.e., financial year 2013-14) are as follows (*):

Return Form​ Brief Description
ITR – 1​​Also known as SAHAJ. It is applicable to an individual having salary or pension income or income from one house property (not a case of brought forward loss) or income from other sources (not being lottery winnings and income from race horses).
ITR – 2It is applicable to an individual or a Hindu Undivided Family having income from any source other than "Profits and gains of business or profession".
ITR – 3It is applicable to an individual or a Hindu Undivided Family who is a partner in a firm and income chargeable to income-tax in his/its hands under the head "Profits or gains of business or profession" does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm.
ITR – 4SAlso known as SUGAM is applicable to individuals and HUFs who have opted for the presumptive taxation scheme of section 44AD/ 44AE.
​ITR – 4It is applicable to an individual or a Hindu Undivided Family who is carrying on a proprietary business or profession.
ITR – 5It is applicable to a person being a firm, LLP, AOP, BOI, artificial juridical person, co-operative society and local authority. However, a person who is required to file the return of income under section 139(4A) or139(4B) or 139(4C) or 139(4D) shall not use this form (i.e., trusts, political party, institutions, colleges, etc.)
ITR – 6It is applicable to a company, other than a company claiming exemption under section 11(charitable/religious trust can claim exemption under section 11​).
ITR – 7It is applicable to a persons including companies who are required to furnish return under section 139(4A) or139(4B) or 139(4C) or 139(4D) (i.e., trusts, political party, institutions, colleges, etc.).
ITR – VIt is the acknowledgement of filing of return of income. 

(*) The aforesaid table gives only a brief overview of the return forms and is not an exhaustive discussion. For more provisions of applicability/non-applicability of the ITR Forms, the readers should go through the discussion on each ITR Form covered in later part.​

6 comments:

  1. Who can use ITR – 1 (SAHAJ)?
    Return Form ITR – 1 (SAHAJ) can be used by an individual whose total income includes:
    (1) Income from salary/pension; or
    (2) Income from one house property (excluding cases where loss is brought forward from previous years); or
    (3) Income from other sources (excluding winnings from lottery and income from race horses or losses under this head).
    Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used only when such income falls in any of the above categories.

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  2. ​Who cannot use ITR – 1 (SAHAJ)?
    Return Form ITR – 1 (SAHAJ) cannot be used by an individual:

    Whose total income for the year includes income from more than one house property.
    Whose total income for the year includes income from winnings from lottery or income from race horses.
    Whose total income for the year includes income chargeable to tax under the head "Capital Gains".
    Whose total income for the year includes exempt income of more than Rs. 5,000.
    Whose total income for the year includes income from business or profession.
    Whose total income for the year includes loss under the head "Income from other sources".
    Who has claimed relief under section 90 and/or section 91
    Who is a resident and ordinarily resident and having any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.​

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  3. Who cannot use ITR – 2?
    Return Form ITR – 2 cannot be used by an individual or HUF whose total income for the year includes income from Business or Profession.

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  4. Who cannot use ITR – 3?
    Form ITR – 3 cannot be used by an individual or HUF whose total income for the year includes income from Business or Profession under any proprietorship.​

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  5. ​Who cannot use ITR – 4S (SUGAM)?
    Form ITR – 4S (SUGAM) cannot be used by an individual/HUF:
    • Whose total income for the year includes income from more than one house property.
    • Whose total income for the year includes income from winnings from lottery or income from race horses.
    • Whose total income for the year includes income chargeable to tax under the head “Capital Gains”.
    • Whose total income for the year includes exempt income of more than Rs. 5,000.
    • Whose total income for the year includes income from speculative business and other special incomes.
    • Whose total income for the year includes income from profession as referred to in section 44AA(1).
    • Whose total income for the year includes income from agency business or income in the nature of commission or brokerage.
    • Who claims relief under section 90, 90A and/or section 91
    • Who is a resident and ordinarily resident and has any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.
    In case of a taxpayer who is engaged in any business eligible for the presumptive taxation scheme of section 44AD or section 44AE but he does not opt for the presumptive taxation scheme, then such a taxpayer has to maintain the books of account of the business as per the provisions of section 44AA​​ and has to get his accounts audited. In such a case he cannot use ITR 4S. Such a taxpayer has to file its return of income in Form ITR – 4.

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  6. ​Who cannot use ITR – 4?
    ​​Form ITR – 4 cannot be used by any person other than an individual or a HUF. Further, an individual or a HUF not having income from business or profession cannot use ITR – 4.​​

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