ITR For Indian Residents

In India, the Income Tax Department offers different Income Tax Return (ITR) forms depending on the type of taxpayer and their income sources.
Here's an overview of ITR 1, ITR 2, ITR 3, and ITR 4:

1. ITR 1 (Sahaj):

• Applicable to: Resident individuals with total income up to ₹50 lakhs.

• Income Sources:

  • Salary or pension income.

  • Income from one house property (excluding cases of brought forward loss).

  • Other sources of income such as interest (excluding lottery winnings and income from racehorses).

  • Agricultural income up to ₹5,000.

• Not applicable to: Individuals who own more than one house property, have capital gains, or have foreign income.

2. ITR 2:

• Applicable to: Individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession.

• Income Sources:

  • Income from salary or pension.

  • Income from multiple house properties.

  • Capital gains from the sale of assets such as shares, mutual funds, or property.

  • Income from foreign assets or sources.

  • Other sources such as interest income, lottery, racehorse winnings.

• Not applicable to: Individuals with income from a business or profession.

3. ITR 3:

• Applicable to: Individuals and HUFs having income from business or profession.

• Income Sources:

  • Income from carrying on a business or profession (including freelancers and professionals like doctors, lawyers, etc.).

  • Income from salary or pension.

  • Income from house property.

  • Capital gains.

  • Other sources such as interest, dividend, lottery winnings, etc.

  • Income from foreign assets or sources.

• Key Requirement: Disclosure of profits and losses from the business or profession and details of partners in a partnership firm (if applicable).

4. ITR 4 (Sugam):

• Applicable to: Resident individuals, HUFs, and firms (excluding LLPs) who have opted for the presumptive income scheme under sections 44AD, 44ADA, and 44AE.

• Income Sources:

  • Business income under the presumptive taxation scheme (small businesses with turnover up to ₹2 crore).

  • Professional income under section 44ADA (professionals with gross receipts up to ₹50 lakhs).

  • Income from salary, pension, one house property, and other sources (excluding capital gains).

  • Agricultural income up to ₹5,000.

• Not applicable to: Individuals with income exceeding ₹50 lakhs, more than one house property, or capital gains.

Each form is tailored to suit specific taxpayer categories, and filing the correct one ensures compliance with tax laws.