What is ITR?

An Income Tax Return (ITR) serves as a crucial document through which individuals provide details regarding their income and the corresponding tax obligations to the relevant tax authorities. The Income Tax Department has introduced a range of forms tailored to different taxpayer profiles and income sources, ensuring accuracy and compliance in tax reporting.

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

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

Age Group Basic Exemption Limit
For individuals below 60 years Rs 2.5 lakh
For individuals above 60 years but below 80 years. Rs 3.0 lakh
For individuals above 80 years Rs 5.0 lakh

Which ITR to file?

Currently, there are seven distinct ITR forms, each designed to accommodate various financial scenarios and taxpayer categories:

  • ITR-1: This form is suitable for individuals with income from salary, one house property, and other sources such as interest income. It's commonly known as the Sahaj form.
  • ITR-2: Geared towards individuals and Hindu Undivided Families (HUFs) having income from multiple sources, excluding income from business or profession.
  • ITR-3: Designed for individuals and HUFs with income from business or profession, along with other sources of income.
  • ITR-4: Suited for individuals, HUFs, and firms (other than LLPs) opting for the presumptive income scheme under sections 44AD, 44ADA, or 44AE of the Income Tax Act.
  • ITR-5: Applicable to firms, LLPs (Limited Liability Partnerships), AOPs (Association of Persons), and BOIs (Body of Individuals).
  • ITR-6: Primarily for companies that do not claim exemption under section 11 (Income from property held for charitable or religious purposes).
  • ITR-7: Intended for persons including companies required to furnish returns under sections 139(4A) 139(4B) or 139(4C) or 139(4D) of the Income Tax Act.

Types of Forms to File ITR

Form 16

Employees receive Form 16, a crucial TDS certificate issued by their employer, detailing various financial aspects. This document outlines the gross earnings, including exemptions like HRA and LTA, providing a comprehensive overview of the individual's taxable income. Additionally, it encompasses details on net taxable income, assorted tax-saving deductions, and salary TDS, aiding in accurate tax computation and compliance.

Form 26AS

Form 26AS serves as a comprehensive record of tax deducted at source (TDS) across diverse income streams, including salaries, interest on investments, and proceeds from property transactions. It meticulously delineates details of self-assessment tax and advance tax payments made by the taxpayer, ensuring transparency and accountability in tax affairs. Furthermore, it encapsulates pertinent information on listed financial transactions, offering insights into the individual's financial footprint.

Form 15G and Form 15H

Mitigating tax deductions is facilitated through the submission of Form 15G and Form 15H, empowering individuals to earn income sans TDS implications.

For those below 60 years of age with gross taxable income below the basic exemption threshold, Form 15G provides a viable avenue to avoid TDS deductions. Conversely, senior citizens with a net tax liability of zero can leverage Form 15H to circumvent TDS deductions.

By furnishing either Form 15G or Form 15H to the tax authority, taxpayers effectively communicate their eligibility for non-deduction of taxes, facilitating smoother financial transactions.