Income Tax News: For the financial year 2023–2024, the income tax filing deadline is July 31. Even though there is plenty of time for taxpayers to finish filing, it is important, particularly for first-time users, to know which Income Tax Return (ITR) form to use. Seven separate forms are released by the Income Tax Department, each serving a distinct group of people. Let’s examine which form, depending on your income and other financial factors, you should fill out.
ITR Form 1: For Income up to Rs 50 Lakh
Fill out ITR Form 1 if your annual income is up to Rs 50 lakh. People on salaries typically utilise this form, which covers income from one residential property, pensions, and salaries. Additionally, it covers up to Rs 5000 in agricultural revenue. However, if you have invested in unlisted shares, are a company director, receive income from capital gains, or receive income from more than one property or business, you are not eligible to use this form.
ITR Form 2: For Income Above Rs 50 Lakh
ITR Form 2 should be used if your income is more than Rs 50 lakh. You must record capital gains or losses, dividend income over Rs 10 lakh, multiple residential properties, and agricultural income above Rs 5000 on this form. Additionally, it is utilised to pay interest on the Provident Fund (PF).
ITR Form 3: For Business Income and More
ITR Form 3 should be used by business owners, investors in unlisted equity shares, and partners in enterprises. If you get income from capital gains, bonuses, horse racing, lotteries, or rental income from several properties, this form also needs to be completed. This form can also be used by freelancers.
ITR Form 4: For Professionals and High-Earning Freelancers
ITR Form 4 should be used by professionals with yearly incomes between Rs 50 lakh and Rs 2 crore, such as doctors, lawyers, and freelancers. For freelancers making more than Rs 50 lakh annually, this form is also appropriate.
ITR Form 5: For Firms, LLPs, AOPs, and BOIs
ITR Form 5 is designed for entities registered as firms, Limited Liability Partnerships (LLPs), Association of Persons (AOPs), and Body of Individuals (BOIs).
ITR Form 6: For Companies
Companies that are not exempt under Section 11 of the Income Tax Act need to fill out ITR Form 6.
ITR Form 7: For Specific Entities Under Certain Sections
ITR Form 7 is required for individuals and companies filing returns under sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act.
To maintain compliance with Indian tax regulations and avoid penalties, it is essential that your income tax returns are filed accurately. Utilising the appropriate ITR form for your income and financial activities can help the procedure go more smoothly and stress-free.
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