Who Need to File Income Tax Return and Which ITR Form Required

Benefits of Filing ITR for a salaried Person, Pensioners and Business/Profession

ITR filing will be beneficial and should be done –

  • To get a visa or a loan.
  • To claim Income Tax refund.
  • If you have earned or have invested  to foreign assets in the effective period.
  • ITR filing is mandatory if the taxpayer is a company or a firm, irrespective of profit or loss.
  • To report loss from business/profession/ capital gains, must file ITR so that the loss will be allowed to carry forward to the next years.

When is it mandatory to file income tax returns (ITR) in India?

If your gross total income is more than the basic exemption limit-

  • 2.5 lakh – for individuals below 60 years of age
  • 3 Lakh –  for individuals 60 years to 80 years of age
  • 5 lakh – for individuals above 80 years of age.

ITR filing is mandatory for the individuals or firm / professionals  if the income is below the basic exemption limit in any of the following conditions:

  • If you have deposited more than 1 Crore rupees in ‘current’ Bank account.  This is not applicable for deposit into Post Office as of now.
  • If you have deposited more than 50 Lakh rupees in one or more of your  ‘savings’ Bank accounts.
  • If you have incurred a total expenditure of more than 2 Lakh rupees on foreign travel for yourself or other persons.
  • Mandatory ITR File if you have incurred more than 1 Lakh rupees towards electricity consumption during the effective period (FY).
  • If your TDS or TCS mount is more than Rs 25,000 ( Rs 50,000 for Sr Citizens).
  • If your Business turnover (Gross receipt) is more than Rs 60 lakh.
  • If your professional income (Gross receipt) is more than Rs 10 lakh

Income Tax Return through e-filing on the portal is now more easy but you should know which form is applicable to you.  In general all salaried and pensioners should file ITR1 but in some cases, it may be different.  It depends on the other income and financial transactions you have made.  A detailed study of applicability of various kind of Income Tax Return form is here –

ITR –1   Who can File it ?

 ITR Form  Type of income Covered    Who Can not  File ITR 1  
   ITR – 1Income from Salary  
Income from Pension    
Income from other sources  (excluding winning from lottery and  
Interest of Savings Bank, FD/RD and all kind of investment in bank and Post Office etc.  
Dividend, Mutual Fund Redemption etc.  
Rental Income of one House  
Agricultural income upto Rs 5000
Total income more than Rs 50 lakh.
Agricultural income more than Rs 5000.
Has  taxable capital gains.
Has income from business or profession.
Rental income from more than one house property.
Assesses is a Director in a company.
Invested in unlisted equity shares at any time during the financial year.
Have assets  outside India or signing authority in any. account located outside India.
If you are RNOR or Non Resident Indian.
You have any foreign income.
If tax has been deducted under Section 194N.
If tax  deduction / payment has been deferred on ESOP.
If you have any BF loss/ needs to be carried forward under any income head.  

ITR – 2   Who can File it ?

   ITR Form  Type of income Covered    Who Can not  File ITR 2  
ITR – 2Income from Salary or Pension
Income from House Property
Income from Other Sources (including Lottery and Race Horses winning)
Assesses is Director in a company
Have investments in unlisted equity shares   RNOR  and non-resident
Capital Gains incomeForeign incomeAgricultural income more than 5,000 rupees.
Assets outside India, including signing authority in any account located outside India  
If tax deducted under Section 194N
If tax deducted deferred on ESOP
Have any BF loss or loss needs to be carried forward under any head of income  
Those who are covered under ITR 1, 3 and 4

ITR – 3   Who can File it ?

   ITR Form  Type of income Covered under ITR 3    Who Can not  File ITR 3  
    ITR – 3Individual or a HUF having income from a proprietary business or is carrying on a profession.  

Business or profession where books of accounts maintained and audited mandatorily.  

Individual Director in a company  

Have had invested in unlisted equity shares at any time during the financial year.  

In ITR 3 you can also include income from House property, Salary/Pension and Income from other sources  

Income of a person as a partner in the firm   Individuals or HUFs who are not eligible to file ITR-1, ITR-2, and ITR-4, should file ITR-3  
Those who are covered under ITR 1, 3 and 4

ITR – 4   Who can File it ?

   ITR Form  Type of income Covered under ITR 4    Who Can not  File ITR 4  
ITR – 4 ITR-4 applies to individuals, HUFs, Partnership firms (non LLPs) residents and whose total income includes:

Business income according to the presumptive income scheme under section 44AD or 44AE  

Professional income according to presumptive income scheme under section 44ADA  

Income from salary or pension up to Rs 50 lakh  
Income from 01 house property, not more than Rs 50 lakh (No loss BF includes)  

Income from other sources having income not more than Rs 50 Lakh (excluding winning lottery & Race horses)  

Individual earning from freelancing alongwith any of the above mentioned sources as a freelancer can also opt for a presumptive scheme if their gross receipts are not more than Rs 50 lakhs.  

A presumptive income scheme under sections 44AD, 44AE and 44ADA is covered when the income is presumed at a minimum rate based on a percentage of gross receipts / gross turnover  

If the business turnover under Presumptive income scheme exceeds Rs 2 crore, the taxpayer will have to file ITR-3. .
Those who are not covered the income criteria mentioned here.

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