Which ITR form to use for filing returns ?

If you are preparing for filing your income tax returns in India then you must be wondering which ITR form to use. The forms available are meant for different purposes so ensure that you understand your scenario first and then pick up which form to use.

This year, the government has introduced the need to file returns for taxation on foreign assets that you might hold even though you do not have taxable income to report in India. Not just that, even if you have signed for opening a savings account abroad, you now need to file your income tax returns ! Sigh !

Given below is a run down on the 5 income tax return forms or ITRs as they are commonly called. This will provide more clarity on which ITR form to fill this year. Note that this article is meant for individuals or HUFs only and does not cover companies for which you have other forms available.

Which ITR form to use to file income tax return?

ITR1 or Sahaj

This is the most basic of all the forms and is to be used for individuals if they have income from

  1. salary or pension
  2. rental income but only from one property
  3. capital gains which are tax free
  4. income from interest and other sources (except winnings from lottery or income from horse racing)

Most of the taxpayers fall in this category. Note that you cannot use this form if you have winnings from lottery or race horses, for that you will need to use ITR2. Also, if you have a second house from which you are drawing rent or if you have any foreign assets then you cannot use this form.

ITR2

ITR2 is to be used by individuals or HUFs with

  1. salary or pension
  2. rental income from more than one property
  3. capital losses brought forward from previous years
  4. capital gains from sale of assets
  5. income from interest and other sources including winnings from lottery or income from horse racing
  6. foreign assets

ITR3

If you an individual or HUF and  a partner in a firm, then you will need to use this form. Use this if you have income from

  1. salary or pension
  2. capital gains earned
  3. one or more houses that have been brought forward
  4. income from other sources
  5. interest, bonus, salary, commission from firm

Which ITR Form to use

ITR4

ITR4 is an income tax return form to be used by an individual or a HUF that have income from a proprietary business or profession, as per below

  1. income from business or profession
  2. income from any other five heads of income under the Income Tax Act
  3. foreign assets

ITR 4s or Sugam

The Sugam form is to be used for business or taxpayers with income of less than Rs 60 lakh a year. If the income is less than 8% of the gross receipt, then you will have to use ITR4 form.

ITR V

The V here stands for Verification and is meant for the income tax department to verify the authenticity of income tax return. This is to be used by all tax payers and is more of an acknowledgment form. Should you file your returns physically, then you need to submit this form along with the ITR form that you used.

And if you e-filed this year, then you will need to sign and send the ITR V form to Bangalore CPC (Central Processing Center) in 120 days by ordinary post.

Hope this helps you to decide while ITR form to use or fill in this year while you file your income tax returns. You can download the income tax forms (ITR Forms 2011 2012) from the income tax website.

Comments

  1. Thanks for making it simpler. I used to always be confused by the forms to be filled for filing returns. Hope many reader would benefit.

  2. Vivek K says:

    Good informative article.

    Sometimes I wonder why so many forms, can’t they simplify things and have one form? Have one form for ITR and Annexures to provide details of different income categories.

    • Exactly. However I believe someday it will be come. The taxation in US is also quite complex but the process is much simpler. Additional income and deduction categories are annexures to main form only and in any tax prep software you keep on answering NO for most of these. Also the annexures have sequence no mentioned so that user will know the order of annexure docs while attaching.

    • TheWealthWisher says:

      Koun samjhayeag inko !

  3. “And if you e-filed this year, then you will need to sign and send the ITR V form to Bangalore CPC (Central Processing Center) in 120 days by ordinary post.”

    So we can e-file the returns on 30th July and send the ITR V by 30th October.
    I don’t understand why they follow this procedure. We have already uploaded our ITR’s on their website and have got an acknowledgment. They can as well as refer to it.

    • TheWealthWisher says:

      Its a double layer or confirmation. I think they shoudl do away with it eventually. The entire advantage of going online is lost if you have to send it by speed post via snail mail. That is like cave man living in the 21st century !

    • Get a digital signature certificate from a certified authority. A signed ITR V is a confirmatory procedure that it was you who uploaded the XML file.

  4. DEVENDER BANSAL says:

    HOW TAX FILE INCOME TAX DEPARTMENT

  5. I have taken Housing lone ,House lone interest is exempted from income tax,so Please tell which ITR form i.e ITR-I,or ITR-2 I fill.

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