Income Tax Returns for Individual: Individual Tax Return

An Income Tax Return (ITR) is a document that taxpayers use to report their income and tax obligations to the tax authorities. So far, the department has notified seven such forms, say; ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7. It is required of every taxpayer to file their ITR before the deadline.

Income Tax Returns for Individual is a crucial content that one who files their ITR should be aware of. The application of Income Tax Return forms differs according to the taxpayer’s income sources, income level, and taxpayer category (Individuals, HUFs, companies, etc).

What is Income Tax Returns for Individuals?

Income Tax Returns for Individuals refers to the form through which individuals file information about their income and tax liability with the income tax department. This form allows individuals to report their earnings from various sources, such as salary, business, or investments, and determine the amount of tax they owe to the government.

By submitting an Income Tax Return, individuals fulfill their legal obligation and ensure compliance with tax laws. Some of the points you need to know about income tax returns for individuals are as follows.

What is ITR-1?

ITR-1 Form, Income Tax Returns for Individuals whose total income for the AY 2023-24 includes;

  • Income from salary/pension; or
  • Income from One House Property (excluding cases where loss is brought forward from former years); or
  • Income from other sources (without including Lottery winnings and Race Horse Income).
  • Agrarian income up to INR 5,000.

What is ITR-2?

ITR-2 is meant for individuals or Hindu Undivided Families (HUFs) whose total income for the assessment year (AY 2023-24) falls under certain criteria;

  • Salary and pension income.
  • Revenue from Real Estate.
  • Revenue from Other Sources (such as Lottery Winnings and Race Horse Revenue).
  • If you’re an Individual Director in a company.
  • If you have had investments in unrecorded equity shares at any time during the fiscal year.
  • Being a Resident Not Ordinarily Resident (RNOR) and non-resident Income from capital earnings.
  • Having any foreign income.
  • Agrarian income of more than INR 5,000.
  • Owning assets (including fiscal interest in any entity) outside India, including signing authority in any account located outside India.
  • If Section 194N has been used to deduct taxes if an ESOP payment or tax deduction has been postponed.
  • If any loss needs to be carried forward under any income head, or if you have any brought forward losses.

What is ITR-3?

Any individual or HUF with income from a personal business or employment must utilize the most recent ITR-3 Form. Individuals who earn money from any of the following sources can submit an ITR-3.

In short, individuals or HUFs who aren’t eligible to file ITR-1, ITR-2, and ITR-4, should file ITR-3.

  • Carrying on a business or profession.
  • If you’re an Individual Director in a company.
  • If you have had investments in unrecorded equity shares at any time during the fiscal year.
  • The return may include income from House property, Salary/ Pension, and Income from other sources.
  • Income of a person in the firm as a partner.
ITR Filing service in Bangalore

What is ITR-4?

The current ITR-4 applies to residents who are individuals, HUFs, or partnership firms (excluding LLPs), and whose total income meets specific conditions;

  • Business income according to the plausible income scheme under section 44AD or 44AE.
  • Professional income according to plausible income scheme under section 44ADA.
  • Income from salary or pension up to INR 50 lakh.
  • Income from a single residential property, not to exceed INR 50 lakh (not including the number of losses that have been brought forward or that need to be carried forward).
  • Income from other sources, excluding lottery and racing horse revenue, but not exceeding INR 50 lakh.

What is ITR-5?

ITR-5 is for businesses, Limited Liability Partnerships (LLPs), Bodies of Individuals (BOIs), Associations of Persons (AOPs), Artificial Justice Persons (AJPs), Estates of the deceased and insolvent, Business Trusts, and Investment Funds. Having an idea about filing income tax returns for individuals will help in smooth process.

What is ITR 6?

For companies not eligible for exemption under section 11 (related to income from property held for charitable or religious purposes), electronic filing of returns is mandatory.

  • For individuals, including businesses, who are obligated to provide returns by Sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), or 139(4F).
  • Every person in receipt of income received from property held under trust or other legal obligation fully for charity or religious purposes, or in part exclusively for such purposes, is required to make a return under section 139(4A).
  • Under section 139(4B), political parties must file a return if their total income surpasses the maximum non-taxable limit.
  • Return under section 139(4C) is needed to be filed by every –
    1. Scientific research association;
    2. News agency;
    3. Organizations mentioned in section 10(23A) also have filing obligations.;
    4. Institution referred to in section 10(23B);
    5. Any hospital or other medical facility, fund, university, or other educational establishment.
  • Return under section 139(4D) is needed to be filed by every university, college, or other institution, which isn’t needed to furnish a return of income or loss under any other provision of this section.
  • Return under section 139(4E) must be filed by every business trust which isn’t needed to furnish a return of income or loss under any other provisions of this section.
  • Return under section 139(4F) must be filed by any investment fund appertained to in section 115UB. It isn’t needed to furnish a return of income or loss under any other provisions of this section.

Conclusion

In conclusion, the various ITR forms are essential for taxpayers to ensure compliance with tax regulations. Each form caters to different income sources and taxpayer categories, ranging from individuals to businesses and other entities. From ITR-1 to ITR-7, these forms have specific requirements and eligibility criteria, making it imperative for taxpayers to select the appropriate form for filing their returns.

Ultimately, proper filing of Income Tax Returns for Individuals facilitates transparency and accountability in the taxation process, contributing to the efficient functioning of the tax system. Income Tax Returns for Individuals also plays a vital role.

Consulting a professional tax consultant like 24efiling helps you to file your Income Tax Returns on time and hassle-free.

FAQs
1. What is Income Tax Returns for Individuals?

Income Tax Returns for Individuals refer to the forms that individuals use to report their income and tax liability to the tax authorities. These forms require individuals to disclose their earnings from various sources such as salary, business profits, capital gains, and other investments.

2. Why is it important to file Income Tax Returns for Individuals?

Filing Income Tax Returns for Individuals is crucial for several reasons. Firstly, it allows individuals to report their income accurately and calculate their tax liability. Filing income tax returns for individuals to claim deductions and exemptions under the tax laws, thereby reducing their taxable income and overall tax liability. 
Moreover, timely filing of returns ensures compliance with tax regulations, avoiding penalties and legal repercussions.

3. What documents do I need to file my income tax return as an individual?

You’ll generally need documents similar to your Form W-2 (for employment income), 1099 forms (for other income sources), records of any deductions or credits, and particular identification information.

4. How do I determine my taxable income as an individual?

To calculate your taxable income, you will generally subtract any eligible deductions and credits from your total income. This will have income from employment, investments, and other sources.

5. Are there any tax credits or deductions available to individuals?

Yes, there are different tax credits and deductions available to individuals, similar to the Earned Income Tax Credit (EITC), education-related credits, retirement savings contributions, and deductions for expenses like mortgage interest and charitable contributions.

6. When is the deadline to file my income tax return as an individual?

The deadline to file your income tax return as an individual is generally April 15th of the ensuing year. Still, this deadline may vary depending on certain circumstances.

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