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ITR Filing

ITR Filing

What is Income Tax Return?

An Income Tax Return is a statement of income earned to calculate tax liability and payment or refund of taxes. Thus, the purpose of filing the return is to report our income and taxes paid thereon to the government.

Who is required to file Income Tax Return?

Any person whose income exceeds the basic exemption limit as specified in the Income Tax Act,1961 is required to file an Income Tax Return. Now, the basic exemption limit changes from year to year. At present the limit is Rs. 2,50,000 for individuals of less than 60 age, Rs. 3,00,000 for individuals in the age bracket of 60-80 years, and Rs. 5,00,000 for individuals of more than 80 age. It is compulsory to file an income tax return if any of the condition is applicable to you :

  • If your taxable income is more than slabs notified in Finance Act for that Year. Example for an Individual Resident below 60 years of Age the Slab is 2,50,000 /-(A.Y. 2020-2021) and for senior citizen it is 3,00,000. Thus if his income is more than 2,50,000/- ( or 3,00,000 in case of senior citizen) then it is mandatory for him to file Income Tax Return.
  • If you are an entity registered as a firm or a company, irrespective of the income or loss during the year.
  • If you have losses under any head and want to carry forward those losses to next year.
  • If you want to claim refund of taxes already paid i.e., TDS, Advance Tax etc.
  • If you are a resident individual holding any kind of Foreign Asset e.g. Immovable property, Bank account etc. or are a signing authority in a foreign bank account then you are compulsorily required to file the return.

Who Can Use ITR-1 For ITR Return?

You can file return in ITR-1 if you are an Individual having :

  • Income from other sources
  • Salary
  • Pension
  • Income from up to one house.
  • Agriculture Income less than Rs. 5,000.
  • Total Income is less than Rs. 50 lakh.

Who Can Use ITR-2 For ITR Return?

You can file return in ITR-2 if you are an Individual having :

  • Income from items in ITR 1 which is more than Rs. 50 lakh.
  • Income from capital gains.
  • Foreign Income.
  • Agricultural Income more than Rs. 5,000.
  • Income from Business or Profession under a Partnership firm.

Who Can Use ITR-3 For ITR Return?

You can file return in ITR-3 if you are an Individual having :

  • Income from items mentioned in ITR 2.
  • Income from Business or Profession under a Proprietorship Firm.

Who Can Use ITR-4 For ITR Return?

You can file return in ITR-4 if you are an Individual having :

  • Section 44AD – Business (Deemed Profit-8% or 6%)
  • Section 44ADA –Profession(Deemed Profit-50%)
  • Section 44AE – Transporters (Deemed Profit- Rs. 7500/vehicle per month)

Who Can Use ITR-5 For ITR Return?

You can file return in ITR-5 if you are an Individual having :

  • Firm
  • Limited Liability Partnerships
  • Association of Person
  • Body of Individuals
  • Artificial Juridical Persons
  • Local Authority or Co-operative Society