Its that time of the year when usually, people are finding various ways and means (people knowing to file return) to get their Tax returns filed by either Chartered Accountants or someone who has some knowledge of it and regularly files their return of income over a period of years. However, thanks to the Central  government that this time around they announced extension of due date of filing return by 1 month on 23rd July, 2019 and gave filers a breather for a month, who will now get busy in their routine(jobs and businesses) and will start working on getting their returns filed around 23rd August, 2019 (few days before the due date). For AY 2019-20, there are 7 forms namely ITR 1 to ITR 7, which can be filed, however as regards Individual he has to choose from ITR-1 to ITR-4, as ITR- 5, belongs to persons other than Individual, ITR-6 is for companies and ITR- 7 is for specifically Trusts or entities  claiming deductions or exemptions u/s 12A, 13A, 10, 35.

For persons other than Individual, i.e. entities they just have one form to fill, so there is no question of identifying the correct form and filing the same, also they usually avail professional services for filing returns, so there arises no question of going wrong. But, for an Individual it is very essential to choose the correct form, as by choosing a particular form it either accepts certain things embodied in the form or by not choosing other form declines to opt for those things (knowingly or unknowingly). Thus, it is essential to choose the correct form not only based on all the Incomes earned during the year, but also on the other criteria’s as prescribed under Rule 12.

So, Let’s make this job easier this year and choose correct form as applicable based on one’s Income and other criteria.

ITR- 1: Income from Salary and Income from Other Sources

Basic Coverage: This form can be used by Individual earning salary income and/or having Income from Interest (taxable under Income from Other Sources). Also, if person has Income from only one house property it can also use ITR- 1.

EXCLUSION:

a) Total income cannot exceed Rs. 50 Lacs

b) Has Assets/ Income Outside India

c) Is a director or has Investment in Unlisted Shares

d) Cannot show net loss from any Income or set-off brought forward loss of past year.

e) No income from Business and Income from Capital Gains.

SUMMARY: One of the simplest forms to be filled, one can also opt for prefilled form and most of the basic details would get auto-populated and very few details would be required to be filled like deductions u/s 80, Income from Interest (Saving bank). The Income details is auto-picked from Form 26AS where Tax deducted by Employer or Banks on FD is reflected.

ITR – 2: Income as Above and Capital gains

Basic Coverage: This form can be used by Individual and HUF earning salary income and/or having Income from Interest (taxable under Income from Other Sources) and income from Capital gains and also if Individual is out from filing ITR- 1 because of other Exclusion clause. Also, if person has Income from more than one house property it can use ITR- 2.

EXCLUSION:

a) Does not have Income from Business

SUMMARY: Option of Pre-filled form is not available here. However, has few details to be shared as compared to ITR-3. If Total Income is more than Rs. 50 Lacs, then assets and liabilities are to be disclosed at cost price.

ITR – 3: Income from Business and Profession

Basic Coverage: This form can be used by Individual and HUF having Business Income and/or salary income and/or having Income from Interest etc. (taxable under Income from Other Sources) and/or income from Capital gains and also if Individual is out from filing ITR- 1 because of other Exclusion clause. Person opting for presumptive scheme of taxation and having Income from Capital Gains are also required to file ITR-3.

EXCLUSION:

a) Intends to offer Income from business under Presumptive Scheme of Taxation u/s 44AD, 44ADA or 44AE.

SUMMARY: Option of Pre-filled form is not available here. Biggest form to be filled as far as Individual and HUF is concerned. Detailed Balance Sheet and Profit and Loss account is required to be filled, unless you are not liable to maintain books of accounts.

ITR – 4: Presumptive Income from Business and Profession

Basic Coverage: This form can be used by Individual or HUF or Firm opting for presumptive income and/or salary income and/or having Income from Interest etc. (taxable under Income from Other Sources) and also if Individual is out from filing ITR- 1 because of other Exclusion clause.

EXCLUSION:

a) Has Income from Speculative Income or Agency Business or Commission Income

b) Total income cannot exceed Rs. 50 Lacs

c) Has Assets/ Income Outside India

d)  Is a director or has Investment in Unlisted Shares.

e) Cannot show net loss from any Income or set-off brought forward loss of past year.

SUMMARY: Option of Pre-filled form is available here. One of the simplest forms to be filled as far as Individual and HUF is concerned. Detailed Balance Sheet and Profit and Loss account is not required to be filled.

It is requested to all the Individuals to take professional help before filing Income Tax return, as some information which is required to be filled may be skipped or some wrong figures may go which should be avoided, as there are heavy penalties ranging from 50% to 200% for filing incorrect information or skipping some information which is mandatory.

Author Bio

Qualification: CA in Practice
Company: Jayesh Sanghrajka and Co. LLP
Location: MUMBAI, Maharashtra, IN
Member Since: 12 May 2019 | Total Posts: 4
WORKING AS A DIRECT TAX MANAGER AT JAYESH SANGHRAJKA AND CO. LLP. View Full Profile

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One Comment

  1. Sudhakaran says:

    Which ITR form can be used for an NRE lady who is getting interest from Fixed Deposits in Indian Banks and eligible to get income tax refund?

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