Different Types of IT Return Forms in India

Income tax returns are forms in which taxpayers file information regarding their earned income and the respective tax applicable to the Income Tax Department. With the help of an income tax form, taxpayers can easily calculate their tax liability, apply for refunds in case of tax overpayment and schedule tax payments.

There are different types of income tax return forms depending on the taxpayer's category and income type. Such forms are: ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7. However, one should be cautious before choosing a tax return form to file. Therefore, to reduce the chances of mistakes, we present this piece describing the various income tax forms and who are eligible for a particular form.

Let's begin!

It is vital to note that an ITR form for individuals or an ITR form for a salaried person is different from that of companies. Given below are some forms eligible for an individual and a company to file for tax returns.

Limited Liability Partnerships (LLPs), trusts and companies must file ITR forms- 5, 6, and 7 while filing income tax returns. Companies and firms with business income, house property, and other income sources are eligible to select these forms. However, incomes from capital gains will not fall under these categories. 

Now, let us get into the details of each ITR form!

This form is also known as the Sahaj form. Individual taxpayers should go for ITR 1 filing. Any other taxpayer is not eligible to choose this form for ITR returns.

Who should apply for this form?

The following individuals can apply for this form:

• An individual who draws income from salary or pension.
• An individual whose income is solely dependent on single housing property.
• A person without any income from capital gains and other business.
• An individual who is not an owner of any foreign asset or does not have any foreign source of income.
• An individual whose agricultural income is up to Rs. 5000.
• A person with additional sources of income like other investments, fixed deposits, etc.
• Any individual without having any income from winning lotteries, horse racing, and other windfalls.
• Individuals who want to club their spouses' or underage children's income with theirs.
• Someone who deposited over Rs. 1 crore in a current account.
• Anyone who paid over Rs. 1 lakh in electricity bills last year.

Who cannot apply for this form?

Any other assessee belonging to the following category is not eligible to file ITR 1 for tax returns.

• One whose income exceeds Rs.50 lakhs.
• Individuals having agricultural income above Rs.5000.
• Applicants with income from capital gains and businesses.
• In case a person is having income from many house properties.
• If an individual is a director in a company, he cannot apply for ITR 1.
• One investing in unlisted equity shares at any point of time during the fiscal year is not eligible to choose this form.
• Owners of foreign assets being a resident and having income from foreign sources. 
• Individuals who are non-residents and RNOR (residents not ordinarily residents).
• A person who is assessable for another person's income cannot file IT returns using this form. In such a case, tax deduction takes place in terms of the other person.

ITR 2 income tax is eligible for those individuals who have their income by selling assets or properties. Individuals having incomes from outside of India can also use this form. Furthermore, HUFs can also apply for ITR 2 form to file income tax returns.

Eligibility criteria to file tax returns by using ITR 2 form

Individuals belonging to the following categories can apply for ITR 2 forms:

• Individuals who accrue income by means of salary or pension.
• Those whose total income exceeds Rs. 50 lakhs
  
• If they gain from salary, pension, house properties and other resources like horse race and lottery
  
• If they are holding unlisted equity shares or ESOPs
  
• If they are a director of a company
  
• One whose income source depends on capital gains, that is, from the sale of an asset or property. 
• In case a person's income is possibly coming from more than one house property.
• Owner of foreign assets and one whose income source is outside India.
• A person whose agricultural income is more than Rs.5000.
• People with incomes from winning a lottery etc.
• If an individual is a director in a company. 
• Non-residents and RNOR.

Categories not eligible to apply for this form

Not all taxpayers should avail of this form for income tax returns. We have categorised such people in the following section for your better understanding.

• Individuals whose total income is inclusive of any profits or gains of a business venture or other profession cannot opt for this form.
• Ones with total income lower than Rs.50 lakhs.

Individual taxpayers or HUFs operating as partners in a firm without conducting any business under the firm are eligible to apply for ITR 3. Taxpayers looking in search of the meaning of ITR 3 should be thorough with the eligibility criteria of the said form.

Who is eligible for this form?

Applicants having the following income sources are eligible to file ITR 3.

• Incomes from investments on unlisted equity shares.
• Individuals continuing a business or profession are eligible.
• Company director.
• Incomes coming from house property, pension, salary, or other sources.
• A person having income by being a partner in a firm.

Who cannot apply for this form?

Taxpayers eligible for ITR 1 and ITR 2 belong to a certain category. Similarly, some taxpayers should not file this form for IT returns. Given below are some of the individuals who are not eligible for this form.

• Any individual with a business turnover below Rs.2 crores and opted the presumptive income (ITR4)
• The ones who do not earn income from a business conducted by a firm cannot apply for ITR 3.
• Taxpayers can file ITR 3 if the taxable income from the business comes in the form of salary, bonus, commission, remuneration and interest. Other than this, any other source of income from the business is not eligible.

Also known by the name Sugam, ITR 4 means that individuals who run a business and accrue income from it or other professions can file for IT returns by using this form. With this income, they can club the earning from any windfall and apply for this form. Additionally, taxpayers from professions like doctors, shopkeepers, designers, retailers, agents, contractors, etc.,  can file their ITR using this form.

Category of taxpayers eligible for this form

ITR 4 meaning is simple for those who are accustomed to the eligibility. Here are some of the eligibility criteria.

• Individuals earning income from businesses.
• One who has a single house property and earns income through it.
• Taxpayers not having income via capital gains or selling of assets.
• If the agricultural income of a person is below Rs. 5000, he can file ITR 4.
• Individuals not owning properties or assets outside India.
• An applicant whose source of income is within India.
• This form is also applicable to businesses where the income earned depends on a presumptive scheme under Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act.

• HUFs, individuals or partnership firms are eligible for ITR-4S Forms 

• If a person’s annual income from salary or pension is up to Rs 50 lakhs

Taxpayers who cannot use this form

Some individuals do not qualify for an application of the ITR-4S form to file tax returns. Such categories are mentioned below.

• Owners of a foreign asset.
• Company directors.
• A person with a foreign source of income.
• Total income of a taxpayer exceeding Rs. 50 lakhs.
• If an applicant carries forward loss under any income head, he cannot utilise this form.
• Investors of unlisted equity shares.
• A non-resident and a resident not ordinarily resident.
• Individuals generating income from more than one housing property.
• Having a signing authority in any account outside India.
• If a taxpayer is an assessee with respect to another person's income where tax deduction takes place in the hands of another person.
• Limited Liability Partnerships (LLPs) cannot avail of this form.
• If your annual turnover is above Rs. 2 crores, you should file your returns under Form 3.

Business trusts, firms, etc.,  must opt for this form to file ITR. ITR 5 means forms that are eligible for partnership firms or LLPs. To understand the meaning of ITR 5 in detail, one should know in-depth about the taxpayers eligible under this form and those who are not.

Eligible taxpayers who can file ITR 5

The following bodies can file IT returns using this form.

• LLPs (Limited Liability Partnerships).
• Co-operative societies.
• Local authorities.
• BOIs (Body of Individuals).
• Artificial judicial persons.
• Firms.
• AOPs (Association of Persons).
• Estate of the deceased and insolvent.
• Investment funds.
• Business trusts.

Bodies who cannot opt for this form

Here is a list of persons not eligible to file ITR 5.

• Any individual filing for ITR 1.
• Hindu Undivided Families (HUFs).
• Any company.
• The ones filing for ITR 7 cannot file for this form.
• Applicants with income from capital gains.

ITR 6 means an income tax return form eligible for companies to file tax returns. Companies can file income tax by this form only electronically.

Who can file ITR 6?

Given below are the bodies and the income sources eligible for this form.

• All companies except the ones claiming exemption under Section 11.
• Incomes earned from housing property.
• Business incomes.
• Incomes from multiple sources.

Who cannot file ITR 6?

In the following section, we enlisted a few organisations and income sources not eligible to file IT returns using ITR 6 form.

• Organisations under Section 11 can claim tax exemptions because the income accrued from these bodies is used for religious or charitable purposes.
• Incomes coming from capital gains.
• Any individual or HUFs.

Individuals or companies required to furnish returns under Section 139(4A) or 139(4C) or 139(4D) or 139(4E) or 139(4F) must utilise ITR 7 form to file income tax returns.

Companies or persons eligible to file ITR 7

As mentioned above, the companies furnishing returns under the said sections can file ITR 7. Given below is an explanation of each section to understand the eligibility criteria. 

• Section 139(4A)- Individuals who derive their income from properties held under trusts or other total legal obligations for charitable or religious purposes or must file IT returns under this section by utilising this form.
• Section 139(4B)- Political parties file returns under this section, given their total earned income exceeds the non-taxable limit. 
• Section 139(4C)- The following bodies should file returns under this Section by using ITR 7 form:
  • News agency
  • Institutions under Section 10(23A)
  • Scientific research association
  • Associations or institutions under Section 10(23B)
  • Any medical institutions, universities, educational institutions, funds, etc.
• Section 139(4D)- Returns to be filed by colleges, universities and other institutions under this section. However, they do not need to present the return of income and losses under other provisions of Section 139(4D).
• Section 139(4E)- Under this section, business trusts file returns without furnishing returns of income or loss.
• Section 139(4F)- Investment funds as per Section 115UB will file returns under this section. While filing returns, it is not necessary to present returns of income or losses under any provision of this section.

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Taxpayers not eligible to file ITR 7

Starting from ITR 1 to 7, one must go for the ITR form for which he or she qualifies. In the same way, there are some individuals and organisations who cannot opt for ITR 7. Some of them are mentioned below:

• Individuals earning from capital gains.
• Any salaried individual or HUF under ITR 1.
• Ones who are eligible for ITR 5 are not eligible to file IT returns by using ITR 7.

Furthermore, as per the finance ministry, the last date of filing ITR for FY 2022-23 is 31st July 2023. Therefore, taxpayers looking forward to filing tax returns must have clarity regarding the forms ITR 1 to 7. This will help them to choose an appropriate form and avoid the hassle of going through the filing process again.