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Which ITR form is applicable to you Income Tax Return for AY 2020-21
October, 23rd 2020

There are four Income Tax Return (ITR) forms applicable to an individual. Selection of correct ITR Filing form is important. An individual who fills a wrong ITR form will have to face consequences. "Selection of appropriate ITR form is important as wrong selection would result in a receipt of defective notice from the Income Tax Department which needs to be rectified within a specified period of time," says Kapil Rana, founder and Chairman, HostBooks. If an individual fails to remove the defect within the specified time, the ITR will be treated as invalid. Consequently, the individual will have to face penalties of non-filing of ITR.

The four ITR forms applicable to an individual are ITR-1 SAHAJ, ITR-2,ITR-3 and ITR-4. Here is the suitability of these ITR forms.

ITR-1 (SAHAJ) – Return in Form ITR-1 can be filed by an ordinary resident individual (not HUF) having an income of up to 50 lakh. Total income for this purpose includes-- income from salary or pension, income from one house property, income from other sources such as interest from bank account (excluding winning from lottery and income from race horses, income taxable under section 115BBDA or Income of the nature referred to in section 115BBE) and where agricultural income is upto 5,000.

ITR-2 – Individuals and HUFs having a total income of more than 50 lakh. The income should not be from profits and gains of business or profession can file ITR-2. An individual having income from salaries, more than one house property, capital gains and income from other sources, having income from sources outside India and holding assets outside India may file ITR-2. An individual holding directorship in a company may also file ITR-2.

ITR-3 - For Individual and HUF having income from business or profession, or an individual holding partnership in a firm may file ITR-3.

ITR-4 – For Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE. A person who is a director in a company or has invested in the unlisted equity shares or has any brought forward/ carry forward loss under house property income cannot file the ITR 4.

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