Which ITR should I file? Income Tax Returns e-fling for FY 2019-20, AY 2020-21

Due date to file Income Tax Return for the FY 2019-20 has been extended to 30th November 2020 for all taxpayers.

What is an ITR?

Income Tax Return is a form in which taxpayer files information about his income and tax thereon to income tax department. The department has specified 7 different forms of ITR i.e. ITR1, ITR2, ITR3, ITR4, ITR5, ITR6, ITR7. Every taxpayer should file their tax on or before specified due date.

Is it mandatory to file an ITR>

Yes, it is mandatory to file an ITR if any of the condition below are applicable:-

1. Gross Annual Income is more than:-

   Particulars	Amount
   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

2. If the taxpayer has more than one source of income like house property, capital gains etc.
3. If the taxpayer want to claim an income tax refund from the department.
4. If the taxpayer have earned from or have invested in foreign assets during the FY.
5. If the taxpayer wish to apply for visa or a loan
6. If the taxpayer is a company or a firm, irrespective of profit or loss.

Which ITR is applicable?

Which ITR is applicable to the taxpayer is explained below:-

ITR 1 OR SAHAJ

This form is applicable to Resident/Individual whose total income for the AY 2019-20 includes:-

• Income from Salary/ Pension; or
• Income from One House Property (excluding cases where loss is brought forward from previous years); or
• Income from Other Sources (excluding Winning from Lottery and Income from Race Horses)
• Agricultural income up to Rs.5000.

Exceptions:

• Total income exceeding Rs 50 lakh
• Agricultural income exceeding Rs 5000
• Taxable capital gains
• Income from business or profession
• Having income from more than one house property
• Director of a company
• If the taxpayer have had investments in unlisted equity shares at any time during the financial year
• Owning assets (including financial interest in any entity) outside India) if the taxpayer is a resident, including signing authority in any account located outside India
• resident not ordinarily resident (RNOR) and non-resident
• Having foreign assets or foreign income.
• If the taxpayer is assessable in respect of income of another person in respect of which tax is deducted in the hands of the other person.

ITR 2

It is applicable to an individual or a Hindu Undivided Family (HUF) whose total income for the AY 2018-19 includes:

• Income from Salary/Pension; or
• Income from House Property; or
• Income from Other Sources (including Winnings from Lottery and Income from Race Horses).

(Total income from the above should be more than Rs 50 Lakhs)

• Individual Director in a company
• 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; or
• Foreign Assets/Foreign income
• Agricultural income more than Rs 5,000

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 assessee, this Return Form can be used where such income falls in any of the above categories.

Exceptions:

This can not be applicable on the Individual whise total income for the AY 2018-19 includes income from business or profession. For these type of income ITR 3 or, ITR 4 is used.

ITR 3

The Current ITR3 Form is to be used by an individual or a Hindu Undivided Family who have income from proprietary business or are carrying on profession. The persons having income from following sources are eligible to file ITR 3 :

• Carrying on a business or profession
• Individual Director in a company
• Income from investments in unlisted equity shares at any time during the financial year
• Return may include income from House property, Salary/Pension and Income from other sources
• Income of a person as a partner in the firm

ITR 4 or SUGAM

The current ITR 4 is applicable to individuals and HUFs, Partnership firms (other than LLPs) which are residents having income from a business or profession. It also include those who have opted for the presumptive income scheme as per Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act. However, if the turnover of the business exceeds Rs 2 crore, the taxpayer will have to file ITR-3.

Exceptions:

• When total income exceeds Rs 50 lakh
• Having income from more than one house property
• If any brought forward loss or loss to be carried forward under any head of income
• Owning any foreign asset
• Having signing authority in any account located outside India
• Having income from any source outside India
• Director of a company
• Having 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 assets or foreign income
• If the taxpayer is assessable in respect of income of another person in respect of which tax is deducted in the hands of the other person.

ITR 5

ITR 5 is for firms, LLPs (Limited Liability Partnership), AOPs (Association of Persons), BOIs (Body of Individuals), Artificial Juridical Person (AJP), Estate of deceased, Estate of insolvent, Business trust and investment fund.

ITR 6

For Companies other than companies claiming exemption under section 11 (Income from property held for charitable or religious purposes), this return has to be filed electronically only.

ITR 7

For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F).

1. Return under section 139(4A) is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.
2. Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount, not chargeable to income-tax.
3. Return under section 139(4C) is required to be filed by every –
• Scientific research association;
• News agency ;
• Association or institution referred to in section 10(23A);
• Institution referred to in section 10(23B);
• Fund or institution or university or other educational institution or any hospital or other medical institution.
4. Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section.
5. Return under section 139(4E) must be filed by every business trust which is not required to furnish return of income or loss under any other provisions of this section.
6. Return under section 139(4F) must be filed by any investment fund referred to in section 115UB. It is not required to furnish return of income or loss under any other provisions of this section.