Income Tax Return (ITR) is a form used to declare a taxpayer’s gross taxable income for a given fiscal year. Filing an ITR is crucial not only for nation-building but also offers several personal financial benefits. It enables you to claim tax refunds, simplifies loan applications, and allows the carry-forward of losses. Additionally, it provides an opportunity to claim deductions and exemptions under the Income Tax Act, 1961.
What is an Assessment Year?
The Assessment Year (AY) is the 12-month period immediately following the financial year (FY). During this time, the income generated in the financial year is assessed and taxed. For example, the Assessment Year for income earned between April 1, 2024, and March 31, 2025, would be AY 2025-26. In simpler terms, the return filed for AY 2025-26 pertains to the income for FY 2024-25.
Types of Income
A person’s income can fall into various categories:
- Income from salary: Earnings received from employment
- Profits and gains from business and profession: Income generated through business activities
- Income from house property: Rental income from owned properties
- Income from capital gains: Profits from the sale of capital assets like shares, property, etc.
- Other sources: Includes dividend income, interest on deposits, royalty income, lottery winnings, and more
Types of ITR Forms
The Income Tax Department has prescribed seven types of ITR forms: ITR-1 to ITR-7. The applicability of a specific form depends on the nature and amount of income and the type of taxpayer.
Commonly Applicable ITR Forms
| Form | Applicability |
|---|---|
| ITR-1 (Sahaj) | For resident individuals with total income up to ₹50 lakh from the following sources: (a) Salary, (b) One house property, (c) Other sources (excluding winnings from lotteries and horse races), (d) Agricultural income up to ₹5,000 Salaried people who have made profits or damages from stock purchases and sales, or if they have business income not eligible to file ITR-1. |
| ITR-2 | ITR-2 forms are used by individuals or Hindu Undivided Families whose total income for the assessment year includes: Income from House Property; Income from from short-term or long-term capital gains/ sale of investments/ property.ITR-2 may be filed by salaried people who have made profits or damages from stock purchases and sales. |
| ITR-3 | For individuals and HUFs with income from business or profession |
| ITR-4 (Sugam) | For resident individuals, HUFs, and firms (except LLPs) with total income up to ₹50 lakh and income from business or profession under sections 44AD, 44ADA, or 44AE |
| ITR-5 | For entities like firms, LLPs, AOPs, BOIs, AJPs, estates of deceased persons, business trusts, and investment funds |
| ITR-6 | For companies not claiming exemptions under Section 11 (charitable or religious purposes) |
| ITR-7 | For entities required to file returns under Sections 139(4A) (charitable trusts), 139(4B) (political parties), 139(4C) (scientific research institutions), and 139(4D) (universities and educational institutions) |
Note: From AY 2022-23 onwards, ITR-7 does not apply to persons whose income is unconditionally exempt.
ITR Filing Deadlines
- 31st July: For individuals and entities not subject to tax audits
- 30th September: For persons subject to tax audits
- 30th November: For persons involved in international transactions and liable to report under Section 92E
Disclaimer
This blog has been written exclusively for educational purposes. It is based on information from the Income Tax Department’s website and various secondary sources. Tax regulations are subject to changes; please consult a tax expert before making tax-related decisions.
