Which ITR should you file - Types of ITR Forms & Eligibility

Introduction

Filing an Income Tax Return (ITR) is a necessary step for individuals, businesses, and other taxpayers to report their earnings to the Income Tax Department. There are different types of ITR forms depending on the source of income and the status of the taxpayer. Choosing the right ITR form is important to ensure accurate filing and avoid penalties. This guide will help you understand the different ITR forms for FY 2025-26, eligibility requirements, and how to choose the correct form based on your income. We will also look at who can file which ITR form and provide a step-by-step breakdown.

What is ITR and the ITR Form?

An Income Tax Return (ITR) is a document that individuals, businesses, and other entities file annually with the Income Tax Department to report their income, claim deductions, and calculate tax liabilities. The ITR form is used to gather the necessary information for tax assessment.

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Key points about ITR:

1. Income Details: ITR includes information about your salary, business income, capital gains, and other sources of income.
2. Tax Deductions: You can claim deductions under sections like 80C, 80D, etc., to reduce your taxable income.
3. Tax Calculation: The form helps you calculate the tax payable after adjusting for deductions, exemptions, and any advance tax or TDS already paid.
4. Submission: After filling out the ITR form, it must be submitted online or in paper format (for specific taxpayers).

Different Types of ITR Forms

There are 9 ITR forms available in India, and the type of ITR form you need to file depends on your income source and status. Here’s a breakdown of the common ITR forms:

ITR-1 (Sahaj)

• Who Can Use It:

  • Individuals earning income from a salary, a pension, and a house property.
  • Income from other sources, like interest or dividends.
  • Total income should be less than ₹50 lakh.

• Who Cannot Use It:

  • Individuals earning income from capital gains or a business/profession.

ITR-2

• Who Can Use It:

  • Individuals and Hindu Undivided Families (HUFs) with income from salary, pension, or multiple house properties.
  • Income from capital gains, or foreign assets.

• Who Cannot Use It:

  • People earning income from a business/profession.

ITR-3

• Who Can Use It:
  • Individuals and HUFs with income from business or profession.
• Who Cannot Use It:
  • People whose income comes solely from salary or house property.

ITR-4 (Sugam)

• Who Can Use It:
  • Individuals, HUFs, and firms (other than LLPs) having income from a business or profession under the presumptive taxation scheme.
• Who Cannot Use It:
  • Individuals have income from multiple sources, like salary and capital gains.

ITR-5

• Who Can Use It:
  • For firms, LLPs, Association of Persons (AOP), Body of Individuals (BOI), cooperative societies, and local authorities.
• Who Cannot Use It:
  • Individuals or HUFs.

ITR-6

• Who Can Use It:
  • Companies that do not claim exemptions under section 11 (income of charitable or religious trusts).
• Who Cannot Use It:
  • Individuals, HUFs, or partnerships.

ITR-7

• Who Can Use It:
  • For individuals, HUFs, companies, and trusts claiming exemptions under section 11 (for charitable purposes).
• Who Cannot Use It:
  • Individuals or HUFs with no exemptions.

Types/Other Forms Required to File ITR

In addition to the ITR forms for individuals, businesses, and other entities might need to file other forms to report their income or specific deductions:

1. Form 16: This is a certificate issued by your employer showing the total salary paid and tax deducted. It's essential for salaried individuals when filing ITR.
2. Form 26AS: This shows details of tax deducted at source (TDS) from your income.
3. Form 10-IE: Used for individuals opting for the new tax regime for tax filing.

These forms ensure accurate filing and tax calculations for individuals and businesses.

Articles Related to ITR

Here are a few articles to help you understand ITR filing better:

1. How to File ITR Online: A step-by-step guide to help you file your ITR on the official Income Tax Portal.
2. Common Mistakes to Avoid While Filing ITR: Key errors to avoid while filing returns to ensure timely processing.
3. How to Claim Deductions Under Section 80C and Section 80D: A guide to tax-saving investments that help reduce taxable income.
4. What Documents Are Needed to File ITR?: A checklist of documents like Form 16, Form 26AS, and others needed for ITR filing.

Which ITR to File and Who is Eligible?

ITR Form

Who Can Use It

Who Cannot Use It

ITR-1 (Sahaj)

Individuals with income from salary, one house property, and other sources

Those with income from business/profession or capital gains

ITR-2

Individuals/HUF with salary, pension, capital gains, or foreign income

Those with business/profession income

ITR-3

Individuals/HUF with business or professional income

Those with only salary or house property income

ITR-4 (Sugam)

Individuals/HUF/Firm with presumptive income under section 44AD/44AE

Individuals with multiple income sources

ITR-5

Firms, LLPs, AOPs, BOIs, and local authorities

Individuals/HUFs

ITR-6

Companies not claiming the section 11 exemption

Individuals or partnerships

ITR-7

Individuals, companies, trusts, and AOPs/BOIs claiming exemptions under section 11

Individuals/HUF without exemption claims

Conclusion

Choosing the right ITR form is crucial for accurate tax reporting. Whether you are a salaried individual, business owner, or professional, the ITR form you use will depend on your income sources and eligibility. Filing ITR correctly ensures compliance with tax laws, avoids penalties, and enables you to claim deductions and exemptions. Be sure to check the eligibility criteria for each form and file on time for a hassle-free tax process.