ITR (Income Tax Return) is a form where you tell the government how much money you earned in a year, how much tax you have already paid, and whether you need to pay more tax or get a refund.
Think of it like a report card for your income that you submit to the Income Tax Department every year.
Types of ITR Forms & Who Should File?
There are different ITR forms for different people. Let’s break it down:
ITR-1 (Sahaj) – For Salaried Employees
Who should file?
- People who earn money from salary, pension, or rent from one house
- Their total income is less than ₹50 lakh per year
✅ Example:
- You work in a private company and earn ₹12 lakh per year.
- You have some bank interest of ₹10,000.
- You should file ITR-1.
ITR-2 – For People with Capital Gains & More Income Sources
Who should file?
- People earning from salary + selling property, stocks, or foreign income
- Income more than ₹50 lakh per year
✅ Example:
- You work in a company and earn ₹15 lakh.
- You also made ₹3 lakh by selling stocks.
- You should file ITR-2.
ITR-3 – For Business Owners & Professionals
Who should file?
- Self-employed people like shopkeepers, doctors, freelancers, and business owners
- People having income from salary + business/profession
✅ Example:
- You are a doctor running a private clinic and earn ₹20 lakh.
- You also have some income from a rented house.
- You should file ITR-3.
ITR-4 (Sugam) – For Small Business Owners & Freelancers Under Presumptive Tax
Who should file?
- Small businesses, shopkeepers, freelancers earning less than ₹2 crore
- They do not want to maintain detailed accounts and pay tax on an estimated profit basis
✅ Example:
- You run a small grocery shop and make ₹40 lakh per year.
- Instead of maintaining books, you pay tax on an estimated profit percentage.
- You should file ITR-4.
ITR-5 – For Partnership Firms & LLPs
Who should file?
- Partnership firms, Limited Liability Partnerships (LLPs), and Associations
✅ Example:
- You and your friend run a restaurant together as a partnership firm.
- Your firm earns ₹1 crore in a year.
- You should file ITR-5.
ITR-6 – For Companies
Who should file?
- Private limited & public limited companies (except charitable companies)
✅ Example:
- A software company earns ₹5 crore.
- It must file ITR-6.
ITR-7 – For Trusts, NGOs, and Political Parties
Who should file?
- Charitable trusts, NGOs, religious institutions, and political parties
✅ Example:
- A charity organization helping poor children gets ₹10 lakh in donations.
- It must file ITR-7.
Why Should You File ITR? (Benefits in Simple Words)
- 1. Avoid Penalties
If you don’t file ITR on time and your income is taxable, you may have to pay a penalty of up to ₹10,000.
- 2. Get a Tax Refund
If too much tax is deducted from your salary or bank interest, you can get it back by filing an ITR.
- 3. Get a Loan Easily
Banks ask for ITR when you apply for a home loan, car loan, or personal loan. It helps them check your financial status.
- 4. Helps in Visa Approval
If you want to travel abroad, many countries like the USA, UK, Canada, and Australia ask
for ITR proof.
- 5. Carry Forward Your Losses
If you make a loss in the stock market or business, you can adjust it in future years by filing ITR.
Conclusion
If you are earning money, you should file the correct ITR form to stay compliant with the law and enjoy benefits like tax refunds, loan approvals, and hassle-free financial transactions.
Would you like help in choosing the right ITR form for yourself?
Overview and summary in corporate language
Types of ITR (Income Tax Return) in India
Income Tax Returns (ITR) are forms that taxpayers use to declare their income, deductions, and taxes paid to the Income Tax Department. Different types of ITR forms are prescribed based on the source of income and category of the taxpayer.
Types of ITR Forms
| ITR Form | Applicable To | Income Sources | Example & Uses |
| ITR-1 (Sahaj) | Individuals (Resident) | Salary, Pension, One House Property, Interest Income (Total income ≤ ₹50 lakh) | Example: A salaried employee earning ₹30 lakh annually files ITR-1. |
| ITR-2 | Individuals & HUFs (Hindu Undivided Families) | Salary, Pension, House Property, Capital Gains, Foreign Income | Example: An individual earning from salary & selling stocks files ITR-2. |
| ITR-3 | Individuals & HUFs (Having Business/Profession) | Income from Business/Profession, Salary, Capital Gains | Example: A doctor running a clinic and earning from shares files ITR-3. |
| ITR-4 (Sugam) | Individuals, HUFs, Firms (Opting for Presumptive Taxation) | Business Income (under Sections 44AD, 44AE, 44ADA), Salary, Pension | Example: A shop owner opting for presumptive taxation files ITR-4. |
| ITR-5 | Partnership Firms, LLPs, AOPs, BOIs | Business & Other Incomes | Example: A partnership firm running a restaurant files ITR-5. |
| ITR-6 | Companies (Except Those Claiming Exemption under Section 11) | Business Income | Example: A private limited IT company files ITR-6. |
| ITR-7 | Trusts, Political Parties, Institutions | Income under Sections 139(4A) to 139(4D) | Example: A charitable trust registered under Section 80G files ITR 7. |