ITR stands for Income Tax Return. The Income-tax Act,1961 releases all the ITR forms and specifies the procedures to be followed. This article provides an in-depth understanding of the definition of ITR and the types of ITR forms.
What is ITR?
Income Tax Return (ITR) is a form in which the taxpayers file information about their income earned and tax applicable, to the income tax department.
The department has notified 7 forms i.e. ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 & ITR-7 to date. Every taxpayer should file his ITR on or before the specified due date. The applicability of ITR forms varies depending on the sources of income of the taxpayer, the amount of the income earned and the category of the taxpayer like individuals, HUF, company, etc.
Why Should You File ITR?
If you want to claim an income tax refund from the department.
If you have earned from or have invested in foreign assets during the FY.
If you wish to apply for a visa or a loan
If the taxpayer is a company or a firm, irrespective of profit or loss.
If you have a loss from business/profession or under capital gains head, you will not be allowed to carry them forward to the next years unless you file the return before the due date.
When is it Mandatory to File Income Tax Returns (ITR) in India?
If your gross total income is more than the basic exemption limit (old regime)-
Age Group | Basic Exemption Limit |
---|---|
For individuals below 60 years | Rs 2.5 lakh |
For individuals above 60 years but below 80 years | Rs 3.0 lakh |
For individuals above 80 years | Rs 5.0 lakh |
However, the new regime requires all individuals to file returns only if their gross income exceeds Rs 3 lakh within a financial year.
If your income is below the basic exemption limit, you will still be required to file your tax return if you meet any of these conditions:
Deposited more than Rs 1 crore in 'current' bank account: You have to mandatorily file a tax return if you have deposited a total of Rs. 1 crore or more in one or more current accounts with a bank. However, no such requirement has been specified for deposits made in the post office current account; or
Deposited more than Rs 50 lakh in 'savings' bank account: You have to mandatorily file a tax return if you have deposited a total amount of Rs 50 lakh or more in one or more of your savings bank accounts.
Spent more than Rs 2 lakh on foreign travel: You have to mandatorily file a tax return if you have incurred a total expenditure of more than Rs 2 lakh on foreign travel whether for yourself or any other person; or
Electricity expenditure is more than Rs 1 lakh: You have to mandatorily file a tax return if you have incurred more than Rs.1 lakh towards electricity consumption during the previous year; or
TDS or TCS is more than Rs 25,000: If the tax deducted at source (TDS)/ tax collected at source (TCS) exceeds Rs 25,000 in the previous year. In the case of a senior citizen (above 60 years), this limit is Rs 50,000.
Business turnover is more than Rs 60 lakh: In case you are a businessman and your total sales, turnover, or gross receipt is more than Rs 60 lakh during the previous year, then you have to mandatorily file a tax return
Professional income is more than Rs 10 lakh: You have to mandatorily file a tax return if you are engaged in a profession and your gross receipts are more than Rs 10 lakh during the previous year.
Who are Exempted from Filing Income Tax Returns?
Central government have the power to exempt specified class or classes of persons from filing income tax returns in addition to the existing exempt persons like individuals having total income less than the basic tax expedition limit, non-residents not having income accruing or arising from India etc.
However, currently, there are no such exemptions that the central government has notified in this regard.
Which ITR to File?

The following infographic will help you find out which type of income tax return is applicable to you for FY 2023-24.
ITR-1 (Sahaj)
Applicability:
Resident individuals having total income up to ₹50 lakh from the following sources:
Salary or pension
One house property (excluding cases where loss is brought forward from previous years)
Other sources (interest, family pension, etc., excluding lottery and horse racing)
Agricultural income up to ₹5,000
Not Applicable:
Total income exceeding Rs 50 lakh
Agricultural income exceeding Rs 5000
If you have taxable capital gains
If you have income from business or profession
Having income from more than one house property
If you are a Director in a company
If you have had investments in unlisted equity shares at any time during the financial year
Owning assets (including financial interest in any entity) outside India, including signing authority in any account located outside India
If you are a resident not ordinarily resident (RNOR) and non-resident
Having any foreign income
If you are assessable with respect to the income of another person with respect to which tax is deducted from the hands of the other person,
If tax has been deducted under Section 194N
If in case payment or deduction of tax has been deferred on ESOP
If you have any brought forward loss or loss needs to be carried forward under any income head
Due Date: July 31st of the assessment year.
ITR-2
Applicability: Individuals and Hindu Undivided Families (HUFs) not having income from profits and gains of business or profession whose total income for the AY 2024-25 includes:
Income from salary/pension
Income from House Property
Income from Other Sources (including Winnings from Lottery and Income from Race Horses)
If you are an Individual Director in a company
If you have had investments in unlisted equity shares at any time during the financial year
Being a resident not ordinarily resident (RNOR) and non-resident
Income from Capital Gains
Having any foreign income
Agricultural income more than Rs 5,000
Owning assets (including financial interest in any entity) outside India, including signing authority in any account located outside India
If tax has been deducted under Section 194N
If in case payment or deduction of tax has been deferred on ESOP
If you have any brought forward loss or loss needs to be carried forward under any income head
Further, in a case where the income of another person like one’s spouse, child etc. is to be clubbed with the income of the assesses, this Return Form can be used where such income falls in any of the above categories.
The total income can be more than Rs 50 Lakhs.
Due Date: July 31st of the assessment year.
Who cannot use ITR-2?
This Return Form should not be used by an individual whose total income for the AY 2024-25 includes Income from Business or Profession. For declaring these types of Income, you may have to use ITR-3 or ITR-4. Go through our comprehensive guide on ITR-2 to know how to fill out the ITR-2 form.
ITR-3
Applicability: The current ITR-3 Form is to be used by an individual or a Hindu Undivided Family who have income from a proprietary business or is carrying on a profession. The persons having income from the following sources are eligible to file ITR-3:
Carrying on a business or profession not opting for presumptive income
Carrying on a business or profession not opting for presumptive income
Carrying on a business or profession who is required to maintain the books of accounts and/or required to get them audited.
If you have had investments in unlisted equity shares at any time during the financial year
The return may include income from House property, Salary/Pension and Income from other sources
Income of a person as a partner in the firm
In short, individuals or HUFs who are not eligible to file ITR-1, ITR-2, and ITR-4, should file ITR-3
Due Date: July 31st of the assessment year.
ITR-4 (Sugam)
Applicability: The current ITR-4 applies to individuals and HUFs, Partnership firms (other than LLPs), which are residents and whose total income includes:
Business income according to the presumptive income scheme under section 44AD or 44AE
Professional income according to presumptive income scheme under section 44ADA
Income from salary or pension up to Rs 50 lakh
Income from one house property, not more than Rs 50 lakh (excluding the amount of brought forward loss or loss to be carried forward)
Income from other sources having income not more than Rs 50 Lakh (excluding income from lottery and race-horses )
Please note that any individual earning income from the above-mentioned sources as a freelancer can also opt for a presumptive scheme if their gross receipts are not more than Rs 50 lakhs.A presumptive income scheme under sections 44AD, 44AE and 44ADA is when an individual or an entity opts to derive its income on a presumptive basis, i.e. when the income is presumed at a minimum rate based on a percentage of gross receipts / gross turnover or based on ownership of commercial vehicles. However, if the business turnover exceeds Rs 2 crore, the taxpayer will have to file ITR-3.
Budget 2023 Update:
Budget 2023 has amended Sec 44AD and Sec 44ADA to revise presumptive taxation limits for FY 2023-24 (AY 2024-25) as follows:
Category | Previous limits | Revised limits |
---|---|---|
Sec 44AD: For small businesses | Rs.2 crore | Rs.3 crore* |
Sec 44ADA: For professionals like doctors, lawyers, engineers, etc. | Rs.50 lakh | Rs.75 lakh* |
Note: *If the amount received in cash in the previous year does not exceed 5% of the total turnover.
Major Changes in ITR-4 Form for AY 2024-25
Below changes are incorporated in the ITR-4 form of the AY 2024-25:
The default tax regime has been changed to the new tax regime following amendments introduced by the Finance Act 2023 to Section 115BAC. For individuals, HUFs, AOPs, BOIs, and AJPs, the new tax regime now applies by default. Taxpayers who prefer the old tax regime must explicitly choose to opt-out. An individual filing ITR 4 must submit Form 10-IEA to opt out of the new tax regime.
ITR forms 4 has been updated to include a column for disclosing the amount eligible for deduction under Section 80CCH. Section 80CCH, was \introduced by the Finance Act 2023, allowing individuals enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 01-11-2022 to claim a tax deduction for the total amount deposited in the Agniveer Corpus Fund.
The Finance Act 2023 has increased the turnover threshold limit for opting for the presumptive taxation scheme under Section 44AD from Rs. 2 crores to Rs. 3 crores, provided that receipts in cash do not exceed 5% of the total turnover or gross receipts for the previous year. Additionally, Section 44ADA was amended to raise the threshold limit of gross receipts from Rs. 50 lakhs to Rs. 75 lakhs, given that receipts in cash do not exceed 5% of the total gross receipts for the previous year. To reflect these changes, ITR-4 has been updated to include a new column for disclosing "receipts in cash" under Schedule BP. The definition of cash includes cheques or bank drafts that are not account payee.
Not Applicable: Who cannot use ITR-4 Form?
If your total income exceeds Rs 50 lakh
Having income from more than one house property
Owning any foreign asset
If you have signing authority in any account located outside India
Having income from any source outside India
If you are a Director in a company
If you have had investments in unlisted equity shares at any time during the financial year
Being a resident not ordinarily resident (RNOR) and non-resident
Having foreign income
If you are assessable in respect of the income of another person in respect of which tax is deducted in the hands of the other person.
If in case payment or deduction of tax has been deferred on ESOP
If you have any brought forward loss or loss needs to be carried forward under any income head.
Due Date: July 31st of the assessment year.
ITR-5
Applicability: For entities other than individuals, HUFs, companies, and persons filing Form ITR-7.
Firms
LLPs
Association of Persons (AOP)
Body of Individuals (BOI)
Artificial Judicial Person
Cooperative societies
Local authorities
Due Date: September 30th of the assessment year.
ITR-6
Applicability: Companies other than those claiming exemption under section 11 (Income from property held for charitable or religious purposes).
Due Date: September 30th of the assessment year.
ITR-7
Applicability: Persons including companies required to furnish returns under sections 139(4A), 139(4B), 139(4C), or 139(4D) (Trusts, political parties, institutions, etc.).
Due Date: September 30th of the assessment year.
General Provisions
Electronic Filing: Most ITR forms are required to be filed electronically. However, some individuals (like those over 80 years of age) can file paper returns.
Verification: After filing, the return must be verified using methods like Aadhaar OTP, net banking, or by sending a signed physical copy of ITR-V to the Centralized Processing Centre (CPC) in Bengaluru.
Revised Returns: If an error is discovered after filing, a revised return can be filed before the end of the assessment year or before the completion of the assessment, whichever is earlier.
Due Dates
Individual/HUF not requiring audit: July 31st
Businesses requiring audit: September 30th
Companies: September 30th
Persons required to furnish returns under sections 139(4A), 139(4B), 139(4C), or 139(4D): September 30th
These due dates are for the assessment year, which is the year following the financial year in which the income was earned.
Penalties
Late Filing: A fee of ₹5,000 if the return is filed after the due date but before December 31st of the assessment year, and ₹10,000 if filed later (₹1,000 if total income does not exceed ₹5 lakh).
Interest: Interest may be charged under sections 234A, 234B, and 234C for delay in filing and payment of taxes.
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