When it comes to filing Income Tax returns, a common person like you and I got confused with different ITR forms available to be filed.
In today’s article, you’ll learn about which ITR form to fill for a salaried person so that you can comfortably fill the appropriate ITR form.
Before digging deep, I would like to tell you that there are a total of 7 ITR forms that you can categorize as below –
- Salaried person only – ITR-1
- Salaried with income from business/profession – ITR-2 to ITR-4
- Business income – ITR-5 to ITR-7
So you can now understand the first 4 forms (ITR-1 to ITR-4) are for salaried people and the last 3 forms (ITR-5 to ITR-6) are for businesses and companies.
Let’s discuss which ITR forms to fill for a salaried person in detail.
Types of ITR Forms for Salaried Person
#1. ITR-1 (Sahaj) Form
If you are a salaried person or pensioner with a total income of up to Rs. 50,00,000, then you should file your income tax returns with the ITR-1 (Sahaj) form.
ITR-1 is called Sahaj because it has been designed to be filed easily for salary earners.
Along with your salaried income, you can also include “Income from Other Sources” as mentioned below –
- Income from one house property only
- Income from Agriculture (income shouldn’t exceed Rs. 5,000)
Who can’t use the ITR-1 Form
- If your total income exceeds Rs.50 lakh
- If agricultural income exceeds Rs 5000 p.a.
- Having taxable capital gains
- Income from business or profession
- Income from more than one house property
- If you are a Director in a company
- Invested in unlisted equity shares at any time during the fiscal year
- Owning assets outside India i.e. foreign assets or foreign income
- Casual income like Winnings from Lottery and Income from Race Horses
#2. ITR-2 Form
You can fill out the ITR-2 Form if you are an individual or HUF if your total income exceeds Rs. 50 lakh in a financial year. Your income may include –
- Income from Salary (or Pension) or
- Income from House Property (More than one); or
- Income from Other Sources (including Winnings from Lottery and Income from Race Horses).
- If you are an Individual Director in a company
- Having invested in unlisted equity shares at any time during the fiscal year
- Income from Capital Gains; or
- Foreign Assets/Foreign income
- Agricultural income of more than Rs 5,000
Who can’t use ITR-2 Form
- If you also have income from a Business or Profession.
Also check out – What is Standard Deduction
#3. ITR-3 Form
You can file your return using the ITR-3 form if you receive income not only from salary but also from a proprietary business or a profession. You are eligible to file ITR 3 if your income sources are –
- Income from Salary/Pension
- A business or profession
- You are an Individual Director in a company
- Invested in unlisted equity shares at any time during the fiscal year
- Income from House Property
- Income from other sources
- Income from being a partner in the partnership firm
Who can’t use ITR-3
- Any person other than an individual or a HUF
- An individual or a HUF does not have income from the business
#4. ITR-4 Form
ITR-4 is called Sugam as it is easy to fill for individuals or businesses because you don’t have to maintain proper account books and calculate your profit & loss. Your income is assumed based on the gross receipts of your business and tax is calculated on that estimate.
You can go for ITR-4 if you are an individual, a HUF, or a Partnership firm(not LLP), and your income includes:
- Income from salary or pension not exceeding Rs.50 lakh
- Business income as per the presumptive income scheme u/s 44AD or 44AE (turnover not exceeding Rs 2 crore)
- Professional income as per presumptive income scheme u/s 44ADA
- Income from one house property, not more than Rs.50 lakh
- Income from other sources (excluding income from lottery and racehorses)
A freelancer can also file ITR under the presumptive scheme if your gross receipts are under Rs.50 lakhs.
Who can’t use ITR-4
- Your total income is above Rs 50 lakh
- If your business turnover exceeds Rs 2 crore, you will have to file ITR-3.
- Income from more than one house property
- If you have any brought forward loss or any loss to be carried forward under any head of income
- You are a signing authority in any account outside India
- You are a Director of a company
- Invested in unlisted equity shares at any time during the fiscal year
- Having foreign assets or foreign income
Also read – Best income tax software in India
ITR Forms for Salaried Person – Comparison
Check out – How to download ITR acknowledgement
Conclusion
Since you now have a better understanding of all 4 ITR forms for salaried people, you can easily decide whether you can use ITR 1 or any other form as per your income sources.
If you have any further questions, do let me know in the comments section.