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What is the difference between ITR-1, ITR-2, and other ITR forms?

Filing an Income Tax Return (ITR) is mandatory for all taxpayers in India who have an annual income above the prescribed threshold. The type of ITR form that a taxpayer needs to file depends on their sources of income, residential status, and other factors. In this blog, we will discuss the difference between ITR-1, ITR-2, and other ITR forms.


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ITR-1 (SAHAJ)

ITR-1 or SAHAJ is the most basic and commonly used form for filing income tax returns. This form is applicable for individuals who have income from salary, one house property, other sources such as interest income, and total income up to Rs. 50 lakhs. ITR-1 cannot be used if the taxpayer has income from business or profession, capital gains, or more than one house property.


ITR-2

ITR-2 is applicable for individuals and Hindu Undivided Families (HUFs) who have income from salary, more than one house property, capital gains, income from business or profession, and other sources. This form is not applicable for individuals who have income from presumptive business or profession or who have an income of more than Rs. 50 lakhs.


ITR-3

ITR-3 is applicable for individuals and HUFs who have income from a proprietary business or profession. This form is not applicable for individuals who have income from presumptive business or profession.


ITR-4 (SUGAM)

ITR-4 or SUGAM is applicable for individuals, HUFs, and firms who have income from presumptive business or profession. This form is not applicable for individuals who have income from salary, capital gains, or more than one house property.


ITR-5

ITR-5 is applicable for LLPs, Association of Persons (AOPs), Body of Individuals (BOIs), and other entities who are not required to file ITR-7.


ITR-6

ITR-6 is applicable for companies who are not claiming exemption under section 11 of the Income Tax Act, 1961.


ITR-7

ITR-7 is applicable for entities who are required to file a return under section 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act, 1961. This form is applicable for trusts, political parties, institutions, and other entities.


In conclusion, the type of ITR form that a taxpayer needs to file depends on their sources of income, residential status, and other factors. ITR-1 is applicable for individuals who have income from salary, one house property, and other sources. ITR-2 is applicable for individuals and HUFs who have income from multiple sources. ITR-3 is applicable for individuals and HUFs who have income from a proprietary business or profession. ITR-4 is applicable for individuals and HUFs who have income from presumptive business or profession. ITR-5, ITR-6, and ITR-7 are applicable for LLPs, companies, trusts, and other entities.

 

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