An income tax return (ITR) is a form which is used to file income tax. Legally, every individual falling under the tax bracket must file ITR. Taxpayers are required to report income from salary, capital gains, property, etc., in the ITR form. Mainly there are two ways of filing taxes:
Physically: Taxpayers can choose to pay their taxes by downloading the relevant form or collecting it from the income tax department. After filing the necessary details, the form has to be submitted at the income tax office under whose jurisdiction the taxpayer’s ward falls in.
Online: ITR can be filed online on the Income Tax department’s website. To do so, the relevant form can be downloaded from the income tax department’s website.
After filling the form, the taxpayer can submit it on the IT department’s online portal. If you want to know about how to do efiling online check out here.
The taxpayer can choose any of the above mentioned methods to file taxes. However, the income tax department has set guidelines making the e-filing of taxes mandatory for some. For instance, individuals and firms using ITR 3 and ITR 4 forms can only file their taxes online. Therefore, it is imperative to understand the different kinds of ITR forms available and their usage.
Different ITR forms
The income tax department offers different types of ITR forms for taxpayers to file their taxes. It is important to understand which form you should use, as using the wrong form will lead to the rejection of the claim. Moreover, taxpayers filing certain forms are required to file taxes online only. Mentioned below are the various types of forms and who can use them.
Form number Applicable on
- Income below Rs.50 lakh from the following sources:
- One house
- Other sources
- Income from the following:
- Sources under ITR 1
- Foreign income
- Agricultural income more than Rs.5,000
- Capital gains
- As a partner in a firm
- Income from the following:
- Everything from ITR 2
Presumptive business income from the following sections of the Income Tax Act, 1961:
- Section 44AD
- Section 44ADA
- Section 44AE
- Companies not claiming exemption under Section 11
- Companies or individuals falling under Section 149 (4A) to Section 149 (4D)
Who should e-file ITR mandatorily?
The income tax department mandates the filing of taxes through online mode only for taxpayers falling under the following:
- An individual, HUF or a firm whose books of accounts need to be audited under section 44AB are required to file ITR online. Under this category, e-filing under digital signature is deemed compulsory.
- An individual (less than 80 years of age) or a HUF filing ITR 1 or ITR 4 who has a return claim or has an income above Rs.5 lakh should file their ITR digitally.
A digital signature is not mandatory for these taxpayers. They can opt for electronic verification or sign the ITR V form. Individuals over 80 years of age (Super senior citizens) and taxpayers with less than 5 lakh yearly income have an option of filing taxes both physically and digitally for the ITR 1 and ITR 4 forms.
- All the companies are required to report the return of their income online under a digital signature.
- Taxpayers with investments or assets outside India have to furnish their income details digitally using electronic verification code. A digital signature is not mandatory.
- All taxpayers claiming tax relief under sections 90, 90A, or 91 need to file their taxes online using a digital signature or electronic verification.
- Individuals filing ITR 5 form have to file it electronically with a digital signature or by using electronic verification. In the case of a firm, the filing has to be done online with a compulsory digital signature.
- Taxpayers who have to provide the report of audit under any of the following sections are required to file ITR online.
- ITR 3 and ITR 4 forms are required to be submitted online using any of the following manners:
- Digital signature
- Electronic verification code
- By submitting verification in the ITR V form
- If the taxpayer’s books of accounts are audited under section 44AB, ITR has to be e-filed using only digital signatures.
- ITR 7 form should be filed online using a digital signature or electronic verification code or ITR V form.
However, political parties have to furnish the details under a digital signature compulsorily.
Understanding these guidelines can ease the process of filing taxes. While furnishing details, it is also important to use the correct manner i.e. digital signature, electronic verification, or ITR V form as different methods are applicable for different forms.