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ITR 1 to ITR 7, Have you Selected Correct ITR Form for AY 2022-23?

July 31 is the last date for filing income tax return (ITR) for the assessment year 2022-23 or financial year 2021-22. There are multiple ITR forms available for the taxpayers for various sources of income. It is important for the taxpayers to know the correct type of ITR form applicable to them.

Do not get confused about which form to choose while filing income tax return. Here is all you need to know

ITR 1 Form or Sahaj

Who Can File ITR 1 Form

ITR 1 form or Sahaj is applicable for salaried individuals with total income of up to Rs 50 lakh for the financial year 2021-22. It must be mentioned salary also includes pension. Taxpayers can also file ITR 1 for the income from other sources such as interest from bank deposits or one house property. Those who have agricultural income of up to Rs 5,000, can also use Sahaj form for filing income tax return. Individuals qualifying as ordinary residents can only file ITR 1 form.

Who Can’t File ITR 1 Form or Sahaj

– Non-residents or residents but non-ordinarily residents
– Hindu Undivided Family (HUF)
– Ordinarily residents having total income of more than Rs 50 lakh
– Director in a company
– Those who hold investments in unlisted equity shares
– Having brought forward losses or losses to be carried forward under the head ‘income from house property’
– Those who have income from any other source, e.g., more than one house property, capital gains, profits or gains of business or profession, winning from lottery
– Taxpayers who hold assets outside India
– If provisions of Section 194N of the Act are applicable i.e. TDS deducted on cash withdrawals exceeding Rs 1 crore (Rs 20 lakh in certain cases)
– Those who are covered under the tax deferral relief for income from Employees Stock Options (ESOP) available to employees of ‘eligible start-ups’

ITR 2 Form

Who Can File ITR 2 Form?

Salaried individuals who earn more than Rs 50 lakh in the financial year 2021-22, need to file ITR 2. Taxpayers with income from capital gains — both short-term and long-term gains, can also opt for ITR 2. If the income includes gains from more than one house property, ITR 2 will be the right form to file the income tax return. For income from other sources such as interest, family pension, dividend or winning lottery, taxpayers can choose ITR 2.

Further ITR 2 will be applicable for 1) Those who hold investments in unlisted equity shares, 2) Director in a company, 3) For income from sources outside India and holding assets outside India, 4) Agriculture income of more than Rs 5,000. It must be noted that non-residents or residents but qualifying as non-ordinarily residents and Hindu Undivided Family (HUF) can file ITR 2 form. 5) Interest accrued on employee contributions to PF to the extent taxable viz. interest on employee contributions in excess of INR 250,000 or 500,000, as applicable

Who Can’t Use ITR 2 Form?

ITR 2 will not be applicable for those individuals whose total income includes any profit from business venture or other profession.

ITR 3 Form

Who Can File ITR 3 Form?

ITR 3 form is for individuals or Hindu Undivided Families (HUFs) who earn from a business or any other profession (not salaried). Those who are partners at a company, must opt for ITR 3 while filing income tax return for AY 2022-23.

Those who are filing business or professional income on presumptive basis and if the taxable income exceeds Rs 50 lakh and have income under the head ‘capital gains’, must go for ITR 3.

Who Can’t File ITR 3 Form?

1) Individuals with a business turnover below Rs 2 crore
2) Taxpayers who do not earn income from a business conducted by a firm cannot apply for ITR 3

ITR 4 Form or Sugam

Who Can File ITR 4 Form?

This form is for resident individuals or HUFs or firms (other than LLPs) who had income either from profession or business in the previous financial year, but want to adopt the presumptive income scheme (PIS) to calculate their income tax liability.

Any business which has a turnover of less than Rs 2 crore can opt to be taxed presumptively. They must declare profits of 8 per cent for non-digital transactions or 6 per cent for digital transactions, whichever one is applicable. Under the presumptive income scheme, small businesses and professions can take a percentage of the total revenue as their presumptive incomes and pay tax on those. They do not need to estimate the actual income by deducting the expenses from the revenue. This scheme will be applicable for professions including legal, medical, engineering or architectural, accountancy, technical consultancy, interior decoration or any other profession as notified by CBDT.

Who Can’t File ITR 4 Form?

1) LLPs are not eligible to file ITR 4
2) Non-resident with income below Rs 50 lakh and income on presumptive basis
3) Director of a company
4) Those who own shares in any unlisted company

ITR 5 Form and ITR 6 Form

Who Can File ITR 5 Form, ITR 6 Form?

These two forms are not for individual taxpayers. ITR 5 form is for partnership firms, business trusts, investment funds and so on. Firms, LLPs, association of partners, business trusts, investment funds usually opt for ITR 5.

ITR 6 is for companies registered other than Section 11.

Who Can’t File ITR 5 Form, ITR 6 Form?

Individual or HUF or company can not file ITR 5 or ITR 6 forms.

ITR 7 Form

Who Can File ITR 7 Form?

ITR 7 form is for those taxpayers including companies which are a charitable or religious trust, political party, research association, news agency or similar organizations specified in the Act.

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