Which ITR Should You File for Income Tax in India?

Types of ITR and which applies to You?

Let identify the right type of ITR form based on your tax profile, income source and amount. Here are the various types of ITR forms and their applicability.

ITR-1 (SAHAJ)

ITR-1 form is applicable if you are an individual resident earning income from salary/pension, one house and other sources, including agriculture income not exceeding Rs. 5,000. Your total annual income should not exceed Rs. 50 lakh in this case.

ITR -2

ITR-2 is applicable if total income from sources mentioned in ITR-1 is above Rs. 50 lakh and if:

• You are a director in a company;
• You own unlisted equity shares;
• You have earned income as capital gains;
• You have foreign assets or foreign income sources; and
• Agricultural income exceeding Rs. 5,000.

ITR -3

ITR-3 form should be used for filing income tax returns if you have a business or you or a professional. This type of ITR is also applicable if you are an individual director in a company and own unlisted shares of a company.

The income tax return file should also include income from house property, salary, pension, as a partner in a firm and other sources.

ITR -4 (SUGAM)

ITR-4 or SUGAM form is used for individuals, HUFs and partnership firms (except LLPs) being a resident having Total Income upto Rs.50 lakhs and having income from Business and Profession which is computed under sections 44AD, 44ADA or 44AE.

ITR-5

ITR-5 is applicable for Limited Liability Partnerships (LLPs), Artificial Juridical Person (AJP), Association of Persons (AOPs) and Body of Individuals (BOIs). The form is also used by investment funds, business trusts, and estates of the deceased and insolvents.

ITR-6

ITR-6 can only be filed electronically and is applicable for all other companies except those claiming exemption under Section 11 of the Income Tax Act, 1961.

ITR-7

ITR-7 is applicable for charitable trusts, political parties, religious organizations, news agencies, scientific research associations, universities, colleges and hospitals.

CBDT Updates on ITR-1 and ITR-4

In January 2020, while the Central Board of Direct Taxes (CBDT) first notified ITR form for FY 2019-20 in advance for the convenience of taxpayers, they also announced revisions to the rules for ITR-1 and ITR-4 form applicability.

According to CBDT, an individual taxpayer who is a joint-owner in a single house property can now file the return in ITR-1 or ITR-4. Secondly, if a person who is otherwise not required to file return but is required to file return due to fulfilment of one or more conditions in the seventh proviso to section 139(1) of the Income-tax Act, 1961 (the Act), i.e., has deposited more than Rs. 1 crore in a bank account or spent Rs. 2 lakh in foreign travel or 1 lakh on electricity during the previous year, and was also made eligible to file ITR-1 Form. You need to keep these new revisions in mind for income tax return filing FY 2019-2020 before selecting the right ITR form.

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