Income Tax News: It’s critical to comprehend the many ITR forms offered by the Indian Income Tax Department as the deadline for filing income tax returns (ITRs) draws near. For numerous taxpayers, Sahaj (ITR-1) and Sugam (ITR-4) are especially important. Making the right form choice guarantees accurate and timely reporting of your income. This is all the information you need to stay updated on Income Tax News and file these forms by the deadline.
What is Sahaj (ITR-1)?
The ITR-1, commonly known as Sahaj, is designed for resident and ordinarily resident individuals whose total income does not exceed ₹50 lakh. This form is ideal for individuals with straightforward income sources. Here’s a breakdown of who can and cannot file ITR-1:
Eligible for ITR-1:
- Individuals earning income from salary or pension.
- Individuals with income from one house property (excluding cases of jointly owned properties).
- Individuals with income from other sources such as interest, dividends, or family pensions (with a cap of ₹5,000 on agricultural income).
Not Eligible for ITR-1:
- Non-resident Indians (NRIs).
- Resident Not Ordinarily Resident (RNOR) taxpayers.
- Individuals with income exceeding ₹50 lakh.
- Individuals with income from business or profession.
- Individuals with agricultural income exceeding ₹5,000.
- Individuals with income from capital gains (short-term or long-term).
- Individuals with investments in unlisted equity shares.
- Directors of companies.
- Individuals claiming tax deduction under Section 194N of the Income Tax Act.
- Individuals with deferred income tax on ESOPs from eligible startups.
What is Sugam (ITR-4)?
The ITR-4, also known as Sugam, is tailored for a specific group of taxpayers, particularly those with multiple income sources and those opting for presumptive taxation schemes. This form is suitable for individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding Limited Liability Partnerships or LLPs).
Who Can File ITR-4:
- Individuals and HUFs with income from salary or pensions.
- Individuals and HUFs with income from one house property.
- Individuals and HUFs with income from other sources such as interest on savings accounts, deposits, or tax refunds (excluding income from lottery and horse racing wins).
- Individuals and HUFs with income computed under presumptive taxation schemes provided by sections 44AD, 44ADA, or 44AE of the Income Tax Act, meant for small businesses and professionals with specified turnover thresholds.
Key Points for ITR-4:
- The form is specifically for those using presumptive taxation schemes for business or professional income.
- Regular books of accounts are not required under these schemes.
- Ensure your business meets the defined turnover thresholds to qualify for filing under this scheme.
What is ITR-2:
The ITR-2 form caters to a broader spectrum of taxpayers compared to ITR-1. It is suitable for individuals and Hindu Undivided Families (HUFs) with more complex income sources. Here’s who can file ITR-2:
Eligible for ITR-2:
- Individuals and HUFs with income from salary or pension.
- Individuals and HUFs with income from one or multiple house properties.
- Individuals and HUFs with income from capital gains (short-term and long-term) from the sale of investments or property.
- Individuals and HUFs with income from other sources such as lottery winnings, horse racing, or legal gambling (including agricultural income exceeding ₹5,000).
- NRIs meeting specific conditions.
- Individuals with foreign income sources.
Not Eligible for ITR-2:
- Individuals with income from business or profession operated as sole proprietorships, partnerships, etc. (There is a separate ITR form designated for business income).
Choosing the Right Form
Apart from Sahaj and Sugam, other ITR forms are available for different taxpayer scenarios, including ITR-2 for more complex income structures and forms specific to companies. Understanding which form to use can save you from errors and potential penalties.
As the deadline for filing ITR approaches, staying updated on Income Tax News and ensuring you use the correct form is crucial. If in doubt, it’s always best to consult a tax advisor for personalized guidance based on your specific income circumstances.
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