Dread filing tax returns? All you need to know about which form to fill

Though filing of income tax returns is a process to be done every year. But one should be aware of changes made by the government in the income tax return forms in order to minimize the chances of error and rework. This year lot of changes has been made in the ITR forms. For instance, taxpayers who have filed ITR 4 last year are now required to file ITR 3 this year. So one must be aware of these changes in order to file the correct ITR form applicable to you. The income tax department will not consider your ITR as valid if you file the wrong ITR Form. Here we bring to your notice the things that will help you in choosing the right ITR forms:

There are total 7 ITR forms available for e-filing. Out of theses 7 forms, only ITR 1, 2, 3 and 4 are applicable for the salaried and individuals. ITR 5,6 and 7 are applicable to partnership firms, Limited liability partnership(LLP), Association of persons and companies. Here we will discuss the ITR forms applicable to salaried and business individuals.

For Salaried Individuals

ITR 1 Sahaj and ITR 2 are available for the salaried individuals and your sources of income will decide which form to use. ITR 1 sahaj is a simplified one-page form introduced by the government to ease the process of tax filing by the salaried individuals. It is applicable for the salaried individuals having income up to Rs 50 lacs.Income can be from salary, pension, income from one house property, interest income or agricultural income up to Rs 5000. So suppose if your salary income is less than Rs 50 lakhs but you are having income from two house properties, then you cannot use this form. In this case, you need to file ITR Form 2 only.

ITR 2 is applicable for all those salaried individuals who are not covered in ITR 1. It covers income from salary, pension, interest income, income from capital gains, foreign income, agricultural income more than Rs 5000. You also need to disclose the detail of your assets and liabilities in the Schedule AL of this form, if your salary income exceeds Rs 50 lakhs. ITR 2A which was applicable last year has been discontinued this year and has been merged into ITR 2 only.

For Business individuals

There has been change in the ITR form applicable for business individuals this year.ITR 3 and ITR 4 Sugam are available for business individuals and HUF for filing the tax return for FY 2016-17.One must be aware of these changes as the last year ITR 4 and ITR 4S were applicable for business individuals and HUF.

ITR 3 is applicable for the individuals and HUF having income from business or profession. If you have any other source of income also, then you should disclose in the same ITR 3 only.You may include income from House property, salary/pension, capital gains, foreign income and income from other sources in this ITR form. ITR 4 Sugam is applicable for the individuals and HUF having income from business and profession and declaring their profits as per presumptive tax scheme. Under presumptive tax scheme, eligible businesses and professionals can declare their profits at a prescribed rate.The turnover of such business should not exceed Rs 2 crore and in case of professionals, the receipts from such profession should not exceed Rs 50 lakhs.You can include income from House property, salary/pension, capital gains, foreign income and income from other sources in this ITR form.