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Two friends, Rohan and Ridhima, found themselves in the same financial situation, but with different levels of ITR knowledge. Rohan knew the ITR filing deadline is 31st July every year, and Ridhima only knew the ITR full form. As first-time taxpayers, they were clueless about which ITR they should file and what forms they must submit. This is not only the case with them, most first time taxpayers are confused about the same. So, in this blog, we are helping them understand everything about ITR types and forms.
Read on as we discuss the types of returns in income tax here.
What is ITR?
An Income Tax Return (ITR) is a form used to report your income and taxes paid to the income tax department. It allows you to claim refunds and carry forward losses. Different ITR forms cater to various income sources and taxpayers status. You can file an ITR in a paper form, electronically under a digital signature, or by transmitting the data electronically under an electronic verification code.
Types of ITR 2025
The Income Tax Department notifies 7 types of ITR returns:
- ITR 1
- ITR 2
- ITR 3
- ITR 4
- ITR 5
- ITR 6
- ITR 7
ITR forms 1 through 4, are for individuals, whereas the latter three categories are for companies, firms, trusts and Limited Liability Partnerships (LLPs).
Taxpayers must identify their appropriate category and file the corresponding ITR before the due date. The correct ITR form depends on the income source, total income, and the taxpayer category(individual, HUF, or company). Let's explore the individual categories in detail.
ITR 1
Also called the Sahaj Form, ITR-1 is the most common ITR filing type for individuals. It is for people who:
1.Draw income from:
- Salary
- Pension
- One house property
- Other sources like the interest from the bank accounts, excluding lottery winnings, horse racing
2. Have an income of up to ₹50 lakhs.
If you fall into this income group, you can file your ITR using Form 16. Compared to various ITR forms, filing ITR 1 is quite simple.
Despite being the most common types of return in income tax, not everyone is eligible. Let us take a look at people who do not fall into the category of ITR 1:
- The total income is over ₹50 lakhs
- Agricultural income exceeds ₹5,000
- Have taxable capital gains
- An income from a profession or business
- Income from more than 1 house property
- Income from directorship in a company
- Have a foreign income
- Investments in any unlisted equity shares during the financial year
- Own assets outside India.
ITR 2
Salaried individuals can choose ITR 1 to file their return; however, if you are salaried but have had capital gains from your investments, you would have to choose ITR 2. ITR-2 is for people who:
1. Draw income from:
- Salary
- Pension
- Lottery winnings
- Capital gains
- Agricultural income that is over ₹5,000
- One or more house property
- Foreign income/ foreign assets
2. Have an income of more than ₹50 lakhs
3. Hold individual directorship in a company
>> Must Read: Don’t Miss Income Tax Return (ITR) Filing 2023 Deadline
ITR 3
ITR 3 is for individuals and members of HUFs who have some income from their profession or business or hold a partnership in a firm. This business income ITR form is for the following :
- A business or profession
- Individual directorship in a company
- Have made investments in any unlisted equity shares during the financial year
- Individuals or HUFs who are not eligible for ITR 1, 2 or 4 can file ITR 3.
The following cannot file ITR 3:
- Companies
- Co-Operative Societies
- Trusts
- Local authority
- Individuals or businesses with an annual turnover of less than ₹2 crores.
ITR 4
Also called Sugam, ITR 4 is only applicable to HUFs, individuals and Partnerships (other than Limited Liability Partnerships, i.e. LLPs) who have the following income sources:
- Business income that is as per income scheme under section 44AD or 44AE
- Professional income that is as per the income scheme under section 44ADA
- The pension or salary earned is less than ₹50 lakhs
- Income from only one house property, but that is less than ₹50 lakhs
- Income from other sources, excluding lottery winnings, horse racing
The following cannot file ITR 4:
- The total income in a financial income is over ₹50 lakhs
- Have an income from more than 1 house property, whether self-occupied or let out
- Own a foreign asset
- Income from an outside India source
- Directorship in a company
- Agricultural income that is over ₹5,000.
ITR 5
This income tax return filing type is for:
- LLPs (Limited Liability Partnerships)
- Firms
- Local authorities
- Artificial Juridical Person (AJP)
- BOIs (i.e. a Body of Individuals)
- AOPs (Association of Persons)
- Estate of the insolvent and deceased
- Investment fund
- Business trust.
ITR 6
ITR 6 is for companies to file their tax returns. Keep in mind that companies can file income tax return 6, electronically only. The following are eligible for ITR 6:
- All companies except those under Section 11
- Income from business
- Income from housing property
- Income from various sources
- Individuals or HUFs cannot file ITR 6.
ITR 7
ITR filing type 7 is for businesses and Limited Liability Partnerships (LLPs). Salaried individuals or HUFs cannot file ITR 7.
>> Also Read: How to Fill Schedule 80d in ITR
Types of Forms to File ITR
The different types of ITR forms related to filing your return of income are mentioned below.
- Form 15G and Form 15H: These self-declaration forms, requiring a PAN, prevent TDS deduction on interest income. Submit them online through the bank’s website. The 15G form is for people below 60 and non-individuals such as HUF, Trusts, Associations, and Clubs. Form 15H is for senior citizens only.
- Form 16: This TDS certificate for salaried individuals details salary earned and TDS deducted. Employers issue it by June 15th each year.
- Form 26AS: This is an annual information statement containing the following details-
- TDS
- TDS Defaults
- TCS
- Advance Tax
- Details of any Specified Financial Transactions (SFT)
- Refund received in a FY
- Pending and completed proceedings
Which ITR to File and Who is Eligible?
There are different ITR types but you need to know which types of return in income tax are suitable for you. Check below-
| ITR | Who can file? | Who can’t? |
|---|---|---|
| ITR 1 |
|
|
| ITR 2 |
|
Individuals / HUFs having a source of income from a company or a career |
| ITR 3 |
|
Individuals or HUFs with no source of professional or commercial profits. |
| ITR 4 | Individuals, HUFs, and firms (other than LLPs) with technical or corporate profits calculated on a “presumed basis. | Who owns unlisted stocks or a corporation’s director |
| ITR 5 | Firms, AOPs, LLPs (Limited Liability Partnership), AOPs (Association of Persons), Artificial Juridical Persons (AJP), BOIs (Body of Individuals), Estate of deceased, Estate of insolvent, Business trusts and investment funds. | Parents who file returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D) |
| ITR 6 | All companies registered under the Companies Act 1956 or Act 2013. | Having income coming from religious purposes or charitable activities. |
| ITR 7 |
|
No other kind of taxpayer. |
It’s Your Turn Now!
Filing your ITR comes with a long list of benefits. You can claim a tax refund; you are easily eligible to get a loan or a visa. However, when filing, you need to understand the types of returns in income tax. People often make the mistake of choosing the incorrect ITR filing type. This can lead to ITR rejection. Ensure you can identify your category and file your ITR correctly.
Disclaimer: The information given above is only for reference. The tax exemptions are subject to the rules and regulations of the Income Tax Act.
