Tax Filing season is here. And the first step towards successful tax filing is to select the right form. In this article, I will explain how to choose the right ITR Form for Income Tax Filing for FY2021-22 / AY2022-23.
There are 7 Income Tax Return Forms to choose from. Let us look at each of them.
ITR – 1
ITR-1 is the simplest form among all. This is basically targeted for salaried individuals who meet all of the following criteria:
- Salary < 50 LPA
- Agriculture Income < 5 K per annum
- Should not own more than 1 property on his name
- Resident Indian
- Income sources being Salary, Pension or Interest
You should not use this if you are have any other income or investments including foreign assets or capital gains
ITR-2 is the form which covers all other things not covered in ITR-1 for an Individual. You will have to file ITR-2 even if you meet any one of the following criteria
- Salary > 50 LPA
- Agriculture Income > 5 K per annum
- Has more than 1 property on his name
- Resident Indian
- Income from other sources like capital gains (stock/mutual fund trading), race, lottery etc
- Having foreign assets or investments
- Capital gains from sale of property
While ITR-2 is restricted to individuals who are salaried, ITR-3 is for businessman, self employed professionals like doctor/lawyer/accountant etc, partners in a firm with salary > 50 LPA.
Criteria for ITR-3 is very similar to ITR-2.
ITR-4 is replica of ITR-1 except that it has to be filed by businessman or self employed professionals
Other ITR Forms
ITR – 5 is used by small companies like LLPs for tax filing.
ITR-6 is used by private limited companies to file tax returns
ITR-7 is usually meant for trusts and societies to file tax.
I have also explained the above information in below short video on Youtube.
Hope you found this basic information useful. Please remember to select the right form from Income Tax department website after taking their questionnaire.