Which ITR form does a taxpayer file?
A taxpayer files the ITR form that matches who the person is and which heads of income that person has. Salary within a simple limit is not the same form as business income, a firm, or a company.
Which form follows the person?
| Form | Who files it | Income it is built for |
|---|---|---|
| ITR-1 | A resident individual, ordinarily resident, with total income up to ₹50 lakh | Salary, one house property, and other sources, with agricultural income up to ₹5,000 |
| ITR-2 | An individual or a Hindu undivided family with no business or professional income | Capital gains, more than one house, foreign assets, or income that ITR-1 cannot take |
| ITR-3 | An individual or a Hindu undivided family with business or professional income | A proprietorship, a profession, or remuneration and interest from a firm |
| ITR-4 | A resident individual, a Hindu undivided family, or a firm that is not an LLP, with total income up to ₹50 lakh | Presumptive income under section 44AD, 44ADA, or 44AE |
| ITR-5 | A firm, an LLP, an association of persons, a body of individuals, and the other persons the form lists | Income of that person, when ITR-7 is not the form |
| ITR-6 | A company | The company’s income, other than a company that must file ITR-7 |
| ITR-7 | A person who has to file under section 139(4A), 139(4B), 139(4C), or 139(4D) | A charitable or religious trust, a political party, and the institutions those clauses name |
Which form does an individual use?
ITR-1 is the short form. It is not for a non-resident, a resident who is not ordinarily resident, a director in a company, a person who holds unlisted equity shares, a person with a capital gain, a person with business or professional income, a person with foreign assets or foreign income, or a person with more than one house property. Those cases move to ITR-2 when there is no business, and to ITR-3 when there is.
ITR-4 is only where the person has opted for the presumptive computation and also fits the form. A person who keeps books and computes actual profit uses ITR-3. How the return is filed is on the income-tax return page.
Which form does a firm or company use?
A partnership firm that is not using ITR-4 files ITR-5. An LLP always files ITR-5. A private company, a public company, and a one person company file ITR-6. A company, trust, or institution that has to report under the charitable and political clauses of section 139 files ITR-7 instead. An individual does not file ITR-5, ITR-6, or ITR-7.
Which choice makes the return defective?
The defect is the mismatch. Capital gains filed on ITR-1, a presumptive form used by a person who is not in those sections, a director on ITR-1, or a foreign asset left off ITR-2 or ITR-3, are the usual ones. The department can treat the return as defective. The form is chosen from the person and the income, not from which file is shorter to fill.
Frequently asked questions
Four questions cover a director, an LLP, a company, and a capital gain.
Can a director file ITR-1?
No. A director in a company is outside ITR-1, even when the only income is salary within ₹50 lakh.
Can an LLP file ITR-4?
No. ITR-4 is for a resident individual, a Hindu undivided family, or a firm other than an LLP that uses the presumptive sections. An LLP files ITR-5.
Does a company file ITR-6?
Yes, unless that company has to file ITR-7 because it claims the exemption for income from property held for charity or religion.
Does a capital gain stay on ITR-1?
No. Capital gains take an individual to ITR-2, or to ITR-3 if there is also business or professional income.
Sources
The forms are notified by the Central Board of Direct Taxes for the assessment year. The presumptive sections are 44AD, 44ADA, and 44AE.