Which ITR Should I File? Type Of ITR Forms For FY 2023-24 (AY 2024-25)

The Income Tax Department has notified seven ITR forms: ITR-1 to ITR-7. However, selecting which ITR you should file can seem daunting. This article aims to clarify the use case of these forms for first-time taxpayers and help determine the appropriate one based on income sources.

What Is ITR?

ITR, or Income Tax Return, is a form where taxpayers disclose their income and taxes to the Income Tax Department. Taxpayers are required to file ITRs annually by specified deadlines to avoid interest and penalties.

Why Should You File An ITR?

Here are some critical reasons for filing income tax returns in India:

• Mandatory if income exceeds the basic exemption limit
• To avoid a penalty for not filing an ITR
• If you have earned from or invested in foreign assets during the FY
• To claim a refund of excess taxes paid
• Required for visa applications and bank loan approvals
• To carry forward losses to future years

Is It Mandatory To File Income Tax Returns (ITR) In India? 

Filing an ITR is mandatory in India if your annual income exceeds the basic exemption limit. Even if income is below the exemption limit, it is compulsory to file an ITR under the following circumstances for a given financial year:

• You have deposited over INR 1 crore  in a current bank account or INR 50 lakhs in a savings bank account
• Your electricity bill exceeds INR 1 lakh in a single bill or on aggregate within a financial year
• You have spent over INR 2 lakhs on foreign travel
• Your TDS/TCS deduction exceeds INR 25,000 or INR 50,000 for senior citizens
• Your turnover from business exceeds INR 60 lakhs
• You earn a professional income of over INR 10 lakhs

Which ITR To File?

There are seven different types of income tax forms. Let us understand which form applies to you based on your income sources and other eligibility criteria¹:

ITR-1 OR SAHAJ

The ITR-1 or Sahaj form is the simplest return form widely used by salaried taxpayers in India. ITR-1 can be used by resident individuals having a total income of up to INR 50 lakhs from the following sources:

• Income on salary or pension
• Income from house property
• Interest income
• Family pension
• Agricultural income up to INR 5,000

ITR-2

The ITR-2 form can be used by individual taxpayers and HUFs whose total taxable income exceeds INR 50 lakhs from:

• Salary, pension
• House property
• Income on capital gains
• Income from other sources, including lottery winnings, horse races
• Foreign income and assets
• Agricultural income over INR 5,000
• Brought forward losses

This form allows clubbing of income of spouse, minor child, etc.

ITR-3

The ITR-3 return form is meant for individual taxpayers and HUFs having income under the head 'profits and gains from business or profession.' This includes:

• Income from proprietary or partnership businesses
• Presumptive income under Section 44AD, 44ADA
• Professionals like doctors, lawyers, accountants, etc.
• Income from other sources like house property, salary, capital gains, etc.
• Compulsory for all directors of a company

ITR-4 Or Sugam

The ITR-4 or Sugam form is meant for individuals, HUFs, and firms with a total income of up to INR 50 lakhs from:

• Presumptive business income under Section 44AD
• Presumptive professional income under Section 44ADA
• Salary or pension income
• One house property
• Other sources except lottery and race winnings

ITR-5

Firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOP), Bodies of Individuals (BOI), Artificial Juridical Persons (AJP), and other associations use ITR-5 to report income from businesses, professions, house properties, capital gains, foreign sources, etc. 

ITR-6

ITR-6 applies to all Indian-registered companies except those claiming exemption under Section 11 (like charitable trusts). Foreign companies with Indian income also file ITR-6. All companies must file electronically.

ITR-7

Trusts, political parties, scientific institutions, colleges, funds, investment funds, and other entities claiming exempt income under specific sections use ITR-7. These include:

• Trusts registered under Section 12A for charitable/religious purposes
• Political parties exempted under Section 13A
• Scientific research institutions under Section 10(21)
• News agencies under Section 10(22B)
• Funds, universities, hospitals, colleges, etc., under Section 10(23C)
• Approved educational institutions under Section 10(23F)
• Approved medical institutions under Section 10(23F)
• Trade unions and associations under Section 10(24)
• Infrastructure debt funds under Section 10(47)
• Business trusts exempt under Section 10(23FC)
• Investment funds referred to in Section 115UB

Income Tax Form FY 2023-24 PDF Download: How To Download ITR 1, ITR 2, ITR 3, ITR 4, ITR 5 Forms 

You can download the latest PDF versions of all ITR forms for FY 2023-24 directly from the official income tax e-filing website: www.incometaxindiaefiling.gov.in. 

Always ensure you use the most current forms as notified by the Income Tax Department, not those from previous years.

Read about Income tax slab FY 2023-2024 (AY 2024- 2025) & Exemption (New & Old Regime Tax Rates) in our latest blog by clicking here!

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Frequently Asked Questions On Which ITR Should I File

1. Who cannot use the ITR-1 form?

You cannot use ITR-1 if you have income from any of these sources

• More than one house property
• Winnings from lottery or horse races
• Capital gains from the sale of assets
• Income from business or profession
• Foreign income or assets
• Income as a partner in a firm
• Unlisted equity shares at any time during the year

2. Who cannot use the ITR-2 form?

Individuals or HUFs whose total annual income includes profit and gains from business or profession and income like interest or salary cannot file the ITR-2 form.

3. Who cannot use the ITR-4 form?

An individual with income from salary, house property, or income on other sources exceeding INR 50 lakhs, or an individual who is a director in a company and has invested in unlisted equity shares, cannot use this form.

References:

1. Income Tax Department <https://incometaxindia.gov.in/pages/downloads/income-tax-return.aspx>

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