What is ITR

What is ITR? Which ITR Should you File? Types of ITR, How to FIle ITR? Income Tax Returns e-filing – ITR forms for FY 2021-22, AY 2022-23

ITR denoted as Income Tax return. Income tax act 1961 controls all the forms of ITR and functions/operations to be done properly. This article will give you in-depth details of the ITR, its types, and how you can file your tax return. We have covered everything that you must know before diving into It. Let's understand ITR step by step.

What is ITR?

ITR (Income Tax Return) is a form that taxpayers are believed to submit to the Income Tax Department of India. In this form, All information related to the taxpayer’s yearly income and the whole amount of tax to be paid is mentioned along with a refund that needs to be credited for that specific year. The Department of income tax has announced seven types of forms to date. The Relevancy of these ITR forms differs on the basis of earned income, source of the income of tax-payer, and category of income. We have mentioned all seven ITR forms below with details.

Types of ITR

ITR-1 This ITR form is also called Sahaj and it must be filled out only by the residential individuals' taxpayers. There are certain conditions to fill out this ITR form which are mentioned below.

• If an individual does not have any income source from another country or does not have any property outside of the country.
• If an individual is receiving his income in the form of a pension or salary.
• If the earned income in agriculture is less than Rs. 5000.
• If an individual’s total income is not crossed Rs. 50 lakhs.
• The individual should not be a director of any company.
• If the individual is not having foreign assets or property.

ITR-2 Form can be used by the (HUF) Hindu undivided family or any individual taxpayer. There are almost the same conditions to fill out the ITR-2 form as the ITR-1 form. Details are given below.

• There are minor differences in ITR-2 Form than ITR-1. The total income of the individual taxpayers should be more than 50 lakhs when received through the house property, pension, lottery, or any other activity.
• If the individual’s income earned through agriculture is more than Rs. 5000. That individual is eligible to fill out ITR-2.

The newly ITR-3 form is for both an individual taxpayer and (HUF) Hindu undivided family whose source of income is business and profession. Following are the eligibility criteria.

• When an individual earns income through profit, a commission
• When you are the director of a company.
• If Your income is through the partnership of any firm.
• If any individual taxpayer made investments in the unlisted shares during the financial year.

• If any individual is getting income through the business as per the income scheme under sections 44AD and 44AE.
• When an individual’s income is through the profession as per the presumptive income scheme under section 44AD.
• If the income is from house property but is not more than Rs.50 lakh.
• When an individual wants to fetch his income on a presumptive basis then it is taken as a presumptive scheme under the sections 44AD, 44AE, and 44ADA.

The ITR-5 form was introduced for the AOPs (Association of Person), LLPs (Limited Liability Partnership), BOIs (Body of individuals), AJP ( Artificial Juridical Person), Investment funds, and Business trust, and local authorities. As per the reference in section 2(31)(vii), this form is for the person who belongs to a firm, AOP, BOI, LLP, artificial juridical person, business trust and investment fund, or local authority. ITR-5 should not be used by the person who has to file the income return under sections 139(4A), 139(4B), 139(4C), and 139(4D).

ITR-6 is for Those companies who do not claim an exemption under section 11(Income from property held for charitable or religious purposes). ITR-6 Form is to be filled out by the companies who do not claim tax exemption on their income under section 11 of the income tax act. This tax return must be filled only by electronic methods.

Those AOPs (Association of Person), LLPs (Limited Liability Partnership), BOIs (Body of individuals), AJP ( Artificial Juridical Person), Firms and Companies have to file income tax returns through the ITR-7, If their claim exemption is under the following details.

Why should one file ITR?

Filing income tax returns is mandatory in India If any of the following conditions are pertinent to you.

1. If any individual willingly wants to claim An income tax refund from the department.
2. If the individual is looking for a visa, a loan or to apply for a visa.
3. If your income or wealth gains are from the foreign assets during the financial year.
4. Irrespective of loss and profit every taxpayer company or a firm must file an income tax return.
5. If an individual’s income exceeds more than the basic exemption limit as mentioned below-
   • Rs. 2.5 lakh For those individuals who are below 60 years of age.
   • Rs. 3.0 lakh for those individuals who are between the age of 60 to 80 years.
   • Rs. 5.0 lakh for those individuals who are above 80 years of age.

However, those individuals are also eligible for income tax returns whose income is below the exemption limit and if they meet with following criteria stated below.

1. Those individuals who have spent or incurred the expenditure of more than 2 lakh for anyone or self on foreign travel.
2. Those individuals who have spent or aggregate expenditure of additionally more than 1 lakh for electricity consumption.
3. Those individuals who have deposited amounts of more than Rs. 1 crore in bank accounts.

Types of forms to file ITR?

Form-16
Form-16 is used as proof of filing income tax returns by the employer to the government. The form-16 is an income tax form for the companies, firms, and unorganized corporations to give their employees details about the deducted tax. This form contains all the details like net salary, HRA and LTA exemptions, gross taxable salary, tax-saving deductions, salary TDS, and any loss that happened with the employee.
Form-26AS
Form-26AS is a compact annual tax statement that contains information about tax deducted or collected at the source and TDS on various salaries, interest, self-assessment, and advances tax. The Budget for 2020-21 had declared the modified Form 26AS providing a more comprehensive profile of the taxpayer going further the details of tax organized and deducted at source. In the month of May, the Income Tax Department announced the new annual report in Form 26AS. Proceeding above the components of tax removed or collected at source, the revised Form 26AS will reminisce every detail provided by banks and financial institutions, which were prematurely documented in their Statement of Financial Transactions.
Form-15G and 15H
Form-15G or 15H helps individuals receive income without the tax deducted at the source. If your net taxable income is below the basic exemption limit and ages under 60 years then you can fill out the form-15 and submit it. If you are a senior citizen and the tax exists is zero on your net revenue earned from profit or gross income then you need to fill out the form-15H. An individual has to submit both of the forms to his employer. Individuals whose total income is below the tax limitation can save tax deducted at source on interest by presenting form-15G or form-15H.

Difference between form-15H and 15G

How to file ITR?

Before proceeding further, We should make sure that we have all these valid documents which are PAN, Aadhaar, Bank account details, investment details, and Form-16. Following are the steps -

1. First login to the myitronline account. If you have the form-16 then click on the “upload form-16 PDF” but in case you do not have this form in PDF format then press on continue.
2. Fill out personal details such as PAN, date of birth, and Name as mentioned on PAN. Name of the father, and address.
3. Fill out the details about your salary, profession, or employer type and name along with TDS information.
4. Enter the details of investment for claiming the deduction.
5. Fill in the details of taxes paid. You can fill in these details by uploading the form-26AS along with the self-assessment tax paid in a relevant financial year.
6. Feed the details of your bank account and go ahead for e-filing and click on proceed to e-filing. If you notice any option of ‘Refund’ or ‘No Tax Due’, Click on proceed to e-Filing. You will get a declaration number on the next screen.
7. Lastly, Click on the e-verify income tax return when your return is filed.

ITR-1

This ITR form is also called Sahaj and it must be filled out only by the residential individuals' taxpayers. There are certain conditions to fill out this ITR form which are mentioned below.

• If an individual does not have any income source from another country or does not have any property outside of the country.
• If an individual is receiving his income in the form of a pension or salary.
• If the earned income in agriculture is less than Rs. 5000.
• If an individual’s total income is not crossed Rs. 50 lakhs.
• The individual should not be a director of any company.
• If the individual is not having foreign assets or property.

ITR-2

ITR-2 Form can be used by the (HUF) Hindu undivided family or any individual taxpayer. There are almost the same conditions to fill out the ITR-2 form as the ITR-1 form. Details are given below.

• There are minor differences in ITR-2 Form than ITR-1. The total income of the individual taxpayers should be more than 50 lakhs when received through the house property, pension, lottery, or any other activity.
• If the individual’s income earned through agriculture is more than Rs. 5000. That individual is eligible to fill out ITR-2.

ITR-3

The newly ITR-3 form is for both an individual taxpayer and (HUF) Hindu undivided family whose source of income is business and profession. Following are the eligibility criteria.

• When an individual earns income through profit, a commission.
• When you are the director of a company.
• If Your income is through the partnership of any firm.
• If any individual taxpayer made investments in the unlisted shares during the financial year.

ITR-4

This ITR-4 is used by the individual, (HUF) Hindu undivided family or partnership firms. ITR-4 is also named Sugam. Eligibility is mentioned below to fill out the form ITR-4.

• If any individual is getting income through the business as per the income scheme under sections 44AD and 44AE.
• When an individual’s income is through the profession as per the presumptive income scheme under section 44AD.
• If the income is from house property but is not more than Rs.50 lakh.
• When an individual wants to fetch his income on a presumptive basis then it is taken as a presumptive scheme under the sections 44AD, 44AE, and 44ADA.

ITR-5

The ITR-5 form was introduced for the AOPs (Association of Person), LLPs (Limited Liability Partnership), BOIs (Body of individuals), AJP ( Artificial Juridical Person), Investment funds, and Business trust, and local authorities. As per the reference in section 2(31)(vii), this form is for the person who belongs to a firm, AOP, BOI, LLP, artificial juridical person, business trust and investment fund, or local authority. ITR-5 should not be used by the person who has to file the income return under sections 139(4A), 139(4B), 139(4C), and 139(4D).

ITR-6

ITR-6 is for Those companies who do not claim an exemption under section 11(Income from property held for charitable or religious purposes). ITR-6 Form is to be filled out by the companies who do not claim tax exemption on their income under section 11 of the income tax act. This tax return must be filled only by electronic methods.

ITR-7

Those AOPs (Association of Person), LLPs (Limited Liability Partnership), BOIs (Body of individuals), AJP ( Artificial Juridical Person), Firms and Companies have to file income tax returns through the ITR-7, If their claim exemption is under the following details.

• If their income comes from the religious and charitable trust Under section 139(4A).
• If they are getting income from political sources under section 139 (4B).
• If their income is through scientific research under section 139 (4C).
• If they are having income from the university or colleges under section 139 (4D).

Taxpayers who are not claiming exemption under Section 139 (4A), Section 139 (4B), Section 139 (4C) or Section 139 (4D) are not eligible to provide ITR-7 form for Income Tax Return.

Using the eligibility checker of Myitronline

• Go to the home page and scroll down to the bottom where you will see “Myitronline Eligibility Checker” click on the tab.
• A new page will be opened where you can see a tab asking for your date of birth and annual income. enter the details carefully in the column and click next.
• After clicking on Next, a new page will show up where you have to answer the questions as Yes or No.
• Now you will be redirected to a page that asks about your basic details like Full name, email ID, Phone number, etc. Fill in all the details correctly and click on the “Next” button.
• The Myitronline eligibility checker shows you whether you should file ITR or not. In case you need to file ITR then click on the button of the “ File ITR Now” Option.

Benefits of filing ITR

If you are willing to know the benefits of filing an income tax return, here you will get clearance about the benefits that will help you to decide whether you should file a tax return or not. The key benefits are given below.

• Claim Tax Refund - If your total income is not more than the basic exemption limit and still tax has been deducted from your income then You do not have to pay any tax for that year, you will have zero tax liability. In this case, You can ask to claim a TDS refund by filing an income tax return.
• Easy Loan approval -Filing an income tax return can make the process of loan approval easy and convenient for individuals. It can help them whenever they want to apply for any loan.
• Effortless Visa processing -It was mandated for the last years that filed income Tax return documents must be provided in most of the embassies and consultants.
• Avoid penalties -In case. If you fail to file your income Tax return on time, then the income tax officer “As per the income tax act 1961” has the right to charge you with the penalties of Rs. 5000.