Right ITR Form: When it comes to filing your income tax return (ITR), it’s crucial to know which form is appropriate for your specific needs. The Income Tax Department provides various types of ITR forms, each catering to different categories of taxpayers and income sources. Understanding the types of ITR forms available and determining which one you need to file is essential for accurate and compliant tax reporting.
Also Read: Nil ITR Filing : Nil ITR Benefits and who is eligible for it?
What are ITR Forms?
Income Tax Return is known as ITR. The Income Tax Department requires that both firms and people who get a salary report their income information should disclosed and file tax returns. In ITR forms, eligible people share the details of the income earned during that financial year and the quantum of tax that applies to the earnings.
Also Read: What happens if you miss the ITR filing deadline of July 31, 2023
Right ITR Forms for Salaried Professional
As both the forms ITR-1 & ITR-2 are for salaried individuals, you should carefully choose the one is the right one for you. Usually, these forms are made available in April. However, in 2023, the forms were available from February itself.
ITR-1 form
ITR 1 form for salaried individuals applies when the individual’s salary includes:
- Earnings through salary or pension. The gross receipts of a salaried individual need to be worth INR 10 lakh or more.
- Income by renting out only one home
- Earnings from sources like the lottery etc
- Income from agriculture (only up to INR 5000)
Also Read: F&O Trading ITR Filing: Everything an trader should know about tax return filing
ITR-2 Form
ITR 2 form is for salaried individuals and Hindu Undivided Family (HUF), in the following situations:
- Earnings through salary or pension. Total income has to exceed INR 50 lakhs.
- Earnings through renting out a house
- Any income from sources like winning a lottery etc
- Income of an individual director of a company
- Investments in unlisted equity shares during the financial year
- If the taxpayer is either a Non-Resident of India (NRI) or a Resident Not Ordinarily Resident (RNOR)
- Earnings from capital gains
- Having a source of foreign income
- Income from agriculture that surpasses INR 5,000
- Owning any asset outside of India, including any account located internationally
- For tax deductions under Section 194N
- For any payment or deduction of tax deferred on ESOP
- If there is any loss that is brought forward or a loss that needs to be carried forward in any income categor
Also Read: ITR Filing AY 2023-24: Maximise your income tax refund while filing ITR
ITR forms are the foundation of the Indian taxation system. These forms give the Income Tax Department necessary information on the different salaried individuals, HUFs and businesses in the country. Everyone with a source of income needs to have a sound knowledge of ITR forms so that they can act as law-abiding members and contributors to the country’s economy. Although there are few more ITR forms but that are not applicable to the salaried Individuals
Also Read: Free ITR filing Online for AY 2023-24: Complete guide to e-file Income Tax Return
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