Tax filing is quite confusing and this is the reasonou need a guide to pick out the right form to file your returns. There are different types of tax return forms based on the source of income of a person. Thus, you need to be careful while selecting your income tax return form. Here, we will discuss how to pick the right Income Tax Return (ITR) form.
Types of Income:
In order to pick out the right ITR form, you need to know the tax slab, which is applicable depending on the salary break-up or the income types specified under the tax laws.
- Income from Salary: If you are an employer ormployee of any company, then the salary earned from the companysalary income head. Any pension that the taxpayer receives is taken into consideration under this section.
- Income source is a self-owned property: There are many people who have more than one commercial or residential property, so they rent it out, give it on lease or for any other purpose. Thus, the regular income earned from these sources falls under this category.
- Income source is profession or business: This section comprises of the money earned from a business that can be a private consultation or through part-time or freelancing.
- Income source is capital gains: Earnings from capital assets for instance, equity markets, stocks, gold or property come under the income from capital gains. There are two types of capital gains i.e. short term or long term. Capital gains further depend on the time since you have owned the house and the money youarned from it.
- Sources others than the ones mentioned above: Any income that does not fall under any of the categories mentioned above comes under income from other sources. Apart from all thist includes the interest levied on incomehich is earned from the winnings of the lottery, savings account in banks, monetary gifts exchanged, etc.
The Different Income Tax Return Forms:
There are several types of forms available to file income tax return. Depending on the type of incomen individual needs to pick out the right form that helps him to select the right form. Now, we will discuss about the forms that are available:
ITR 1 (Sahaj): Individuals whose income source is pension or salary need to select ITR1 or Sahaj form. Whereas individuals who have other sources to earn their income for instance, rental from an owned property or interest earned on deposits, etc. cannot select this form.
People or HUFs (Hindu Undivided Family), who have exempt earnings (such as dividends) of above Rs. 5000, can make use of Form ITR 1. However, individuals who have earned their income using foreign assets or lottery prizes cannot use this form to file their tax returns. Likewise, this form cannot be used, if an individual seeks deductions under Section 90 or 91.
ITR 2: As compared to other formshis one is much more complex. This form is used by any individual or a Hindu Undivided Family that earns their income from salary or even if they have more than one property. This form can be used by those who have gone through a loss of income due to a house/property. However, the income source of the individual must not be from any foreign income or capital gains. ITR 2 is also not used by those who pursue a business or profession.
ITR 2A: One of the most recent forms in Income tax returns is the ITR 2A. Taxpayers whose income source is pension or salary and/or the income source exceeds from more than one house property and/or income from distinct sources can make use of Form 2A to file returns. Incomes of people from any sort of capital gains or through any foreign assets or deduction of taxes under Section 90 or 91 cannot go for this form.
ITR 3: ITR 3 is the form that can be used by the ones that are partners of any firm. However, you cannot use this, if you are the only owner of the business or are proprietors.
ITR 4: If the annual income of an individual or a Hindu Undivided Family running a business or profession is more than 60 lakhs; then they can make use of ITR Form 4 in order to file returns of their taxes.
ITR 4S (Sugam): If the gross income of the business owner of a small scale industry does not exceed more than Rs. 60 lakhs; then they can make use of ITR 4S form to file their tax returns.
ITR 5: This form is used by firms, including LLPs, Association of Persons (AOPs) and Body of Individuals (BOIs), co-operative banks etc. to file their taxes.
ITR 6: Any companies, apart from those that claim exemptionccording to Section 11, have to fill the ITR Form 6 in order to file their income tax returns every year.
ITR 7: ITR form 7 is a specialized form that is filled by individuals or companies that need to submit their returns as defined under Section 139(4A) or Section 139(4B), Section 139(4C) or Section 139(4D). These forms discussed above can be downloaded in all the existing versions.
All you need to do is to figure out the most suitable ITR form, then you can easily file your tax return online and you do not have to worry about anything else.
Steps to File Income Tax Return Form Online
Depending on the category and type of different sources and level of income, we have different income tax forms available for us. However, there are few prime requisites that you need to follow before filing an online income tax return form.
You Need to Have the Following Things-
- Bank statements
- Form 16
- Photocopy of the return for of the previous year
Make sure that all required the documents are ready. Along with the documents you need to follow the steps mentioned below in order to go through a smooth online filing process of your income tax return form online.
Steps to Streamline your Income Tax Returns Filing-
- Registration – In order to register, you need to have your Permanent Account Number (PAN) and this is also the user’s ID.
- Tax Credit Statement (Form 26AS) – You need to check this for the last financial year. It will list all the taxes that have been deducted and have been deposited to the Income Tax Department.
- The TDS (Tax Deducted at Source) of Form 16 must be equal to the ones that are mentioned in Form 26AS.
- Current year’s Tax Return – Under the ‘Download’ menu, make sure that you have Income Tax Return Forms and then you need to select the current financial year. Make sure that you have picked up the right ITR form for yourself. Including this, you also have an option that guides you to accomplish the entire process on your portal itself, using the ‘Quick e-file ITR’ link.
- Software for Return Preparation – This is more like a spreadsheet that can be used through Open Office, Microsoft Office, or any other spreadsheet application that are online and make sure to fill the form using details mentioned in Form 16.
- ‘Calculate Tax’ tab is where you need to click in order to find out the tax that you need to pay. If you require this, make sure to pay your due tax and fill in the details of the challan in your tax return.
- ‘Validate’ tab is used to confirm the information filled.
- Generate an ‘XML file’ of the form and then save it on your computer.
- Upload Return – You need to select the current financial year in the ‘Upload Return’, which is on the left-hand side of the portal, pick the XML file that you have saved earlier. Along with this, you might have an option that allows you to sign the file digitally. Select ‘Yes’ in case you have a digital signature, and ‘No’ if you do not have one.
- ITR - V - If you have successfully completed the process of filling the form, you will get to see an appropriate message on the website. This allows you to download an acknowledgement form which is called the ITR-Verification or ITR-V.
- There after you need to sign a printed copy of your ITR-V form and send it to the nearest Income Tax Department office through Speed Post or even normal and it needs to reach the office within 120 days after filing the returns. One cannot only use the official site of Government of India to file their tax returns. As along with the official website, you can also make use of several private portals that allow you to file returns online and charge them some specific fee according to the services offered to them.
Before filing your income tax return form, you need to make sure to pick out the most suitable ITR form and rest the online application is quite easy.
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