In India income sources are different and making decisions about net taxable income is so difficult. Like salary, capital gain, rental income, interest income, business and profession income, director income, share income, agricultural income, dividend income, lottery income, etc.
If you knew something about income tax, TDS, TCS and you can file yourself otherwise you have found a nearby tax consultant who files your income tax return.
All the time taxpayers don’t know which forms fill up for my income. In this article, I am giving important information regarding income tax forms and which form you should use for income tax filing.
1. ITR – 1
Individuals who have earned their Income for a Financial Year only through the following means are eligible to fill the ITR-1 SAHAJ form.
Salary or Pension
One House Property (except in case of losses brought forward from preceding years)
other sources excluding from Lottery, Racehorses, Legal Gambling, etc. Other sources include FD interest, spousal pension, etc.
2. ITR 2
The use of the ITR-2 Form is applicable to the following means of income only. This form is available for both Individuals as well as Hindu Undivided Families. Individuals earning an income only through the following means are eligible to fill and submit the form to the Income Tax Department.
Earning Income through a salary or pension
Income through House Property.
Earning Income through capital gains (Short Term and Long Term)
Earnings through Other Sources (includes Income through Lottery Winnings, through bets on Racehorses, and other Legal methods of Gambling)
The Income Tax Returns, if clubbed together with that of a spouse, minor child, etc. needs to ensure that their sources of income are similar to those stated above. Only then can their returns be filed together. A difference of earnings in even one category makes the Assessee liable to fill a separate and applicable Income Tax Returns Form.
3. ITR 3
The ITR 3 is applicable for individuals and HUFs who have income from profits and gains from business or profession. The persons having income from the following sources are eligible to file ITR 3 :
Carrying on a business or profession
Income from House property,
Salary/Pension and Income from other sources
Loss or Profit from Shares Trading
Long Term and Short Term Capital Gain or Loss
4. ITR 4
Under existing rules of the Income Tax Act, 1961, Individuals/HUF/Partnership Firms having any of the following types of income are required to file ITR Form 4:
Business Income computed under section 44AD or section 44AE
Income from the profession earned under section 44ADA
Salary/Pension
Income from one house property (excluding the cases where loss is to be carried forward or brought forward loss)
Income from other sources (excluding winning from lottery or income from other forms of legal gambling such as horse betting)
Presumptive Taxation Scheme under Section 44AD?
ITR Form 4 is submitted by taxpayers who file their income tax returns under section 44AD of the Income Tax Act, 1961 to avail the benefits of the presumptive taxation scheme. The presumptive taxation scheme under section 44AD facilitates small businesses by saving them from the tedious task of maintaining books and accounts. Businesses registered under section 44AD are not required to maintain their accounts on a regular basis. They can pay tax as per the prescribed rate while filing their income tax return using ITR 4.
If you file the wrong form, then you may receive notice from the income tax department.
For more information contact me on 9821606040 or tax.quid@gmail.com
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