In this article we will discuss what is income tax return (ITR) policy in India. How can we file our income tax details and what are the different types of income tax return.
WHAT IS ITR?
ITR(Income Tax Return) is a form which a person submit to income tax authorities Department of India. It contains information about the person’s income And taxes to be paid on it during the year. Information filed in ITR should related to a particular financial year, i.e Starting from 1 April and ending on 31 March of the next year.
Income can be various form such as:
- Income from salaries/pensions
- Profit and gains from Business and Profession
- Income from House Property
- Income from Capital Gains
- Income from other Sources such as Dividend, Intrest on deposits, royalty income, Winning on lottery etc.
WHO SHOULD FILE ITR?
1. Gross Total Income (Before deduction u/s 80C to 80U) exceeds Rs.2.5 lakhs in FY 2020-21 This limit is Rs.3 lakhs for senior citizen (aged above 60 years but less than 80) and Rs.5 lakhs for super senior citizen (aged above 80 years)
NOTE:- ( Section 194P Conditional Relaxation for senior citizens who are of the age of 75 year or above from filing return.
Of income-tax under Union Finance Bill 2021/Budget 2021)
2. A company or affirm having profit or loss in financial year.
3. If you have more than one source of income like house property, capital gain etc.
4. If you want to claim an income tax refund from department.
5. If you earned from or having invested in foreign asset during financial year.
6. If you wish to apply a loan or visa.
WHICH ITR SHOULD I FILE?
The Department has notified 7 various forms namely
1) ITR-1:-
Income from salary/pension Income from one house property Income from other sources Agricultural income upto Rs.5000 (Note: Income <50 lakhs)
2) ITR-2:-
Income from: Everything from ITR-1>50 lakhs Capital gains More than one house periptery Foreign income/Foreign Asset Agricultural income > Rs.5000
3) ITR-3:-
Income from: Everything from ITR-2 Business/Profession Partner in a partnership firm Individual director in a company
4) ITR-4:-
Income from Individual, HUFs, Partnership firm (except LLPs) Opted for presumptive tax scheme u/s 44AD,44ADA, 44AE Annual Turnover up to Rs.2 Crore.
5) ITR-5:-
Income from Firms LLPs (Limited Liability Partnership) AOPs (Association for Person) BOIs (Body of Individuals)
6) ITR-6:-
Companies not claiming exemption under section 11.
7) ITR-7:-
Income under Section 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), 139(4F).