The CBDT has notified the Income Tax Return (ITR) Forms 1 to Form 7 vide notification number 329(E) dated 28th May 2020 for the assessment year (AY) 2020-21. However, the income tax return filing is currently available only for ITR 1 and ITR 4 whereas others will be available shortly.
ITR-1: The ITR 1 form or Sahaj is largely used by the salaried individuals. Sahaj is for individuals being a resident (other than not ordinarily resident) having a total income up to Rs 50 lakh, having Income from Salary, one house property (single ownership), interest income and agricultural income up to Rs 5,000. However, this form is not for an individual who is either Director in a company or has invested in Unlisted Equity Shares.
ITR-2: This form is for Individuals and HUFs not having income from profits and gains of business or profession.
ITR-3: This form is for individuals and HUFs having income from profits and gains of business or profession.
ITR-4 (SUGAM): This form or Sugam form is for Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE
However, this form is not for an individual who is either Director in a company or has invested in Unlisted Equity Shares.
ITR-5: This form is for persons other than- (i) individual, (ii) HUF, (iii) company and (iv) person who are filing Form ITR-7.
ITR-6: This form is only for those companies which is not claiming exemption under section 11.
Exemption U/s 11 of Income Tax Act, 1961 for companies: Section 11 provides exemption for income derived from property held under trust wholly for charitable or religious purposes to the extent such income is applied for charitable or religious purpose in India. However, this exemption shall be subject to certain conditions.
ITR-7: This form is for persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only.
Sections 139(4A)- Every person who is in receipt of the following income for which he is taxable, must file a return of income, if such income (computed before allowing any exemption under sections 11 and 12) exceeds the maximum amount not chargeable to tax:
Section 139(4B): Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount which is not chargeable to income-tax.
Section 139(4C): Return under this Section 139(4c) includes institutions that are compulsorily required to file tax return if the amount accumulated by the institution exceeds the maximum allowable limit of exemption. This excludes other exemption benefits enjoyed by the institution. Such return shall be filed in the same way as if it were a return required to be furnished under section 139(1)
List of institutions are as follows:
1. Research Association referred to in section 10(21);
2. News Agency referred to in section 10(22B);
3. Association or Institution referred to in section 10(23A);
4. Institution referred to in section 10(238);
5. Fund or Institution referred to in sub-clause (iv) or Trust or Institution referred to in sub-clause (v) or any University or Other Educational institution referred to in sub-clause (vi) or any Hospital or Other Medical Institution referred to section 10(23C) in sub-clause(via);
i. Mutual Fund referred to in clause (23D) of section 10;
ii. Securitization Trust referred to in clause (23DA) of section 10;
iii. Venture Capital Company or Venture Capital Fund referred to in clause (23FB) of section 10;
6. Trade Union Association referred to in sub-clause (a) or (b) of section 10(24).
7. Body or Authority or Board or Trust or Commission (by whatever name called) referred to in clause (46) of section 10;
8. Infrastructure Debt Fund referred to in clause (47) of section 10;
The institutions that come under Section 139(4c) intend to claim tax exemptions as per the following clauses under of Section 10:
Clauses are: 21, 22B, 23A, 23C, 23D, 23DA, 23FB, 24, 46 and 47.
Section 139(4D): Return under this section is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section.
Section 139(4E): Under this section return must be filed by every business trust which is not required to furnish return of income or loss under any other provisions of this section.
All the above forms have been notified with following additional information, which are as follows:
Note- ITR filing is mandatory even if person has income which is not exceeding maximum amount chargeable to tax, but expenditure exceeds the limit as mentioned above in the previous year.