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Top Bite this Week
Which is the right ITR for you?
The tax filing deadline is almost upon us. As you would know, the deadline this year has been postponed to 30 Sep 2021 due to the pandemic. One of the many things that worry taxpayers is the usage of the right tax return or the ITR. We bring you a primer on which ITR should you choose.
Choosing the right ITR
ITR 1 or Sahaj?
This form can be used by a resident individual whose total income comes from the below-mentioned sources or meets the following conditions
- Income from Salary/ Pension; or
- Income from One House Property (cases of loss brought forward from previous years and carry forward is excluded); or
- Income from Other Sources (Gains from Lottery & income from Race horses excluded)
- Agricultural income up to Rs.5000
- Having total income up to Rs. 50 lakh
- No TDS deducted u/s 194N & no-income-tax deferred on ESOP
- You are not an individual director in any company
- You are not holding any unlisted equity shares at any time during the financial year
This form can be used by an individual or a HUF whose total income for the FY 2020-21 come from the below-mentioned sources.
- Income from Salary/Pension; or
- Income from House Property; or
- Income from Other Sources (includes Gains from Lottery & Income from Race Horses) OR
- You are an individual director in a company or holding unlisted shares at any time during the Financial Year
- Have capital gains
- Foreign Assets/Foreign income
- Agricultural income higher than Rs 5,000
- Showing clubbed income with spouse/child in these categories
This form can be used by an individual or HUF who has income from business sources or from following a profession. In addition to these criteria, you could also have income from salary/pension and/or house property/income from other sources.
- Carrying on a business or profession
- If you are an Individual Director in a company
- If you have had investments in unlisted equity shares at any time during the financial year
- Income of a person as a partner in the firm
- Have capital gains
ITR 4 or Sugam
This form is applicable to individuals, HUFs and partnership firms(other than LLPs) and includes incomes from
- Business income and are using the Presumptive income scheme under Sec 44AD or Sec 44AE
- Professional income under Presumptive income scheme under Sec 44ADA and
- Total Income is less than Rs. 50 lakh
- No Income tax-deferred on ESOP
This form is applicable to all firms like LLPs, Association of Persons (AOPs), Body of Individuals (BOIs), Artificial Juridical Person (AJP), Estate of the deceased or insolvent, business trust, and investment funds.
All companies other than the ones who claim deduction under Sec 11(Income from property held for religious or charitable purposes) should use this ITR.
All individuals or companies who are required to file their returns under sections 139(4A), 139(4B), 139(4C), 139(4D),139(4E), 139(4F).
Where can you file your tax returns?
The process of return filing can be a nerve-wracking process for many. So we at Fisdom have decided to make it convenient for you. You can now file IT returns right on your Fisdom App for free. Isn’t that so cool? And all it takes is 3 simple steps.
- Upload your Form 16 or fill in the details manually
- Review income tax computation
- Confirm and file ITR
Your ITR will be filed immediately and you will receive an acknowledgment from the IT Dept.
YOU ASK- WE ANSWER ?
I have taken an education loan for my wife’s higher studies. Can I claim the deduction of interest payment on the loan? – Ankit Tiwari
Education loan taken for wife is eligible for deduction. Therefore, you can claim the tax deduction of interest payment of education loan under section 80E.