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calendar_monthPublished on 28 Jul, 2023
autorenewUpdated on 22 Nov, 2023
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Written by Care Health Insurance
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The Income Tax Return, or ITR not a new term to you we believe. When there is a buzz around the ITR deadline which is 31st July 2023, it is high time you keep your proofs handy to justify your earnings!
Well, the very next thing that comes to your mind when you file your income tax return is that which ITR applies to you. As a first-time taxpayer, it may come as a surprise to you that there are different types of ITR, and choosing the right kind is essential.
Read on as we discuss the types of return in income tax here.
The Income Tax Department notifies 7 types of ITR returns:
The first four ITR categories, that is, ITR 1 to ITR 4, are for individuals, whereas the latter 3 categories are for companies, firms, trusts and Limited Liability Partnerships (LLPs).
Every taxpayer has to identify his/ her category and file the ITR accordingly before the due date. The applicability of the various ITR forms depends on the source of income of the person concerned, the total amount of income and the taxpayer’s category, whether they are a company, a member of HUF (Hindu Undivided Family) or an individual. Let us take a look at the different individual categories in detail.
Also called the Sahaj Form, ITR-1 is probably the most common ITR filing type for individuals. It is for people who:
1. Draw income from:
2. Have an income of up to ₹50 lakhs.
If you fall in this income group, then you can file your ITR using Form 16. As compared to various ITR forms filing of ITR 1 is quite simple.
Despite being the most common types of return in income tax, not everyone is eligible. Let us take a look at people who do not fall into the category of ITR 1:
Salaried individuals can choose ITR 1 to file their return, however, if you are salaried but have had capital gains from your investments, you would have to choose ITR 2. ITR-2 is for people who:
1. Draw income from:
2. Have an income of more than ₹50 lakhs
3. Hold individual directorship in a company
>> Must Read: Don’t Miss Income Tax Return (ITR) Filing 2023 Deadline
ITR 3 is for individuals and members of HUFs that have some income from their profession or business, or hold a partnership in a firm. People who have an income through the following are eligible for ITR 3:
The following cannot file ITR 3:
Also called Sugam, ITR 4 is only applicable to HUFs, individuals and Partnerships (other than Limited Liability Partnerships, i.e. LLPs) who have an income in the following forms:
The following cannot file ITR 4:
ITR 6 is for companies to file their tax returns. Keep in mind that companies can file income tax return 6, electronically only. The following are eligible for ITR 6:
ITR filing type 7 is for Limited Liability Partnerships (LLPs) and businesses. Salaried individuals or HUFs cannot file ITR 7.
>> Also Read: How to Fill Schedule 80d in ITR
Filing your ITR is good practice. It not only makes your income legal but also comes with a long list of benefits. You can claim a tax refund, you are easily eligible for getting a loan or a visa. However, when filing, you need to understand the types of return in income tax. People often make the mistake of choosing the incorrect ITR filing type. This can lead to ITR rejection. Make sure you are able to identify the category that you fall in and file your ITR correctly.
Disclaimer: Plan features, benefits, coverage, and underwriting of claims are subject to policy terms and conditions. Please refer to the brochure, sales prospectus, and policy documents carefully.
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