What is Income Tax Return (ITR)?

An Income Tax Return (ITR) is a form that individuals, businesses, and other entities submit to the Income Tax Department of India to report their income, taxes paid, and other financial information. Filing ITR is mandatory for those who earn above a certain threshold and ensures compliance with Income Tax laws. The ITR process is crucial for claiming refunds, carrying forward losses, and maintaining financial transparency.

Types of ITR Forms

ITR-1 (Sahaj)

For: Salaried individuals with income up to ₹50 lakh. It covers income from salary, one house property, other sources like interest, and agriculture income (up to ₹5,000).
Best for: Simplified filing for people with straightforward income sources.

ITR-2

For: Individuals or HUFs (Hindu Undivided Families) with income from more than one house property, capital gains, or foreign income.
Best for: Taxpayers with complex financial situations, including income from multiple sources and capital gains.

ITR-3

For: Self-employed individuals, professionals, and business owners who earn income from business or profession (either on a regular or presumptive basis).
Best for: Individuals with business or professional income.

ITR-4 (Sugam)

For: Small businesses, self-employed individuals, and HUFs with income from business or profession under the presumptive taxation scheme (Sections 44AD, 44AE, and 44ADA).
Best for: Small businesses and individuals earning income under the presumptive taxation method.

ITR-5

For: Firms, LLPs (Limited Liability Partnerships), AOPs (Associations of Persons), and Cooperative Societies.
Best for: Non-individual entities like firms and cooperatives.

ITR-6

For: Companies (except those claiming exemptions under Section 11 for charitable purposes).
Best for: Companies reporting business income.

ITR-7

For: Trusts, charitable institutions, political parties, and others claiming deductions/exemptions under specific sections (139(4A), 139(4B), etc.).
Best for: Non-profit organizations and entities claiming tax exemptions.

Steps to File ITR Online

1. Choose the Correct ITR Form: Identify which ITR form applies to your income and category.
2. Collect Necessary Documents: Gather documents like salary slips, bank statements, Form 16, profit & loss statements, and tax payment receipts.
3. Register on the Income Tax Portal: If you haven’t already, create an account on the official Income Tax e-filing portal.
4. Fill in the ITR Form: Enter your income details, tax deductions, and other relevant information in the form.
5. Verify the Form: Check for any discrepancies and verify the form for accuracy.
6. Submit and Pay Taxes (if any): File your return and pay any remaining taxes due.
7. E-Verify the ITR: You can verify your ITR using Aadhaar OTP, Net Banking, or Digital Signature.
8. Download Acknowledgment: Once submitted, download the ITR acknowledgment (ITR-V) for your records.

Documents Required for ITR Filing

1. PAN card
2. Aadhaar card
3. Form 16 (if salaried)
4. Bank statements
5. Details of other income sources (interest, dividends, etc.)
6. TDS Certificates
7. Proof of tax deductions (80C, 80D, etc.)
8. Capital gains details
9. Business/professional income details (for ITR-3 and ITR-4)