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ITR Meaning

The Income Tax Return, or ITR, is a mechanism that taxpayers use to provide reports to the IRS about their earnings and tax payments. A taxpayer must register his or her ITR on or before the deadline. The ITR method that applies to a taxpayer is determined by the class of taxpayer, such as individuals, HUFs, corporations, and so on, and you choose the ITR based on the existence and type of income as well as overall income.

Before filing an ITR, any taxpayer can assess their tax liability and make payments. In the event of a failure carryforward and setoff of brought-over losses, you can file an ITR. Check form 26AS for information on TDS and other taxes, such as FD interest, while filing your ITR. You’ll just use your Form 16 to fill out the particulars of your income and tax-saving deduction statements.

Types of ITR

ITR 1

Individuals residing in India with a total income of up to Rs 50 lakh are eligible. ITR-1 may be filed by someone who earns money from a job, a home, or other outlets. An NRI is unable to file an ITR-1. ITRs may be filed using Form 16 by salaried taxpayers.

ITR 2

Individuals and HUF for revenue from sources other than their enterprise or occupation. Individuals and NRIs who earn money from a job, a home, capital gains, or other sources may file Form ITR-2. ITR-2 may be filed by salaried people who have made profits or damages from stock purchases and sales.

ITR 3

Individuals are required to disclose their earnings from a company or occupation. Salaried people who earn money from the intraday stock exchange or futures and options trading should file Form ITR-3. Individuals may use ITR-3 to record revenue from jobs, real estate, capital gains, company or trade (including presumptive income), and other sources.

ITR 4

Individuals, HUFs, and partnership companies are subject to a presumptive taxation system on their earnings. ITR-4 is used to report revenue from a company with a turnover of up to Rs 2 crore that is subject to section 44AD taxation. In addition, ITR-4 is for revenue from an occupation with a turnover of up to Rs 50 lakh that is subject to section 44ADA taxation. ITR-4 may be filed by a freelancer who works in a notified occupation.

ITR 5

LLP, AOP, and BOI are both acronyms for alliance companies. LLPs, partnership companies, AOPs, and BOIs will file ITR-5s to disclose profits from their businesses and professions, as well as some other sources of income.

ITR 6

is a tax return used by businesses to report revenue from industry or occupation, as well as all other forms of income.

Invest in elss funds

ITR 7

is the federal tax return for businesses, partnerships, and trusts that continue to be excluded from paying income tax.

Types of Forms to File ITR

Form 16

An employee gets a Form 16 TDS certificate from their boss. The gross pay, as well as exemptions such as HRA and LTA, are listed on Form 16. The form also includes information on the employee’s net taxable pay, all other revenue or loss reported tax-saving deductions and salary TDS.

Form 26AS

The tax deducted at source (TDS) on different earnings, such as wages, debt, and the selling of immovable property, is detailed on Form 26AS. Details of self-assessment tax, advance tax paid by an individual, and listed financial transactions are also included on the form.

Form 15G and Form 15H:

You will earn income without TDS using Form 15G and Form 15H. If you are under the age of 60 and your gross taxable income is less than the basic exemption cap, you can file a Form 15G. If you are a senior citizen and the tax owed on your net salary is zero, you will file a Form 15H. To the individual who pays your taxes, you must apply Form 15G or Form 15H.

Which ITR to File and who is eligible?

The following are the specifics of these ITR modes, including who should use them and who should not:

ITR Who can File Who cannot File
ITR 1 –  Individuals who meet the criteria for Ordinarily Resident status and have a gross income of up to Rs 50 lakh.

Having revenue from the following sources: wages, a single-family residence, and other sources of income up to Rs 5,000;

This form often refers to equivalent income earned by a single individual, such as a partner or infant, and combined in the taxpayer’s hands.

  • Non-residents; Hindu Undivided Family (HUF); Hindu Undivided Family (HUF); Hindu Undivided Family (HUF); Hindu Undivided Family (HUF); Hindu Undivided Family (HUF); Hindu Undivided
  • Residents with a net income of more than Rs 50 lakh regularly;
  • a company’s director;
  • Holding unlisted equity investments; bringing losses forward under the heading of “profits from house property”;

Having revenue from sources outside of India and properties located outside of India

ITR 2 – Non-residents / Residents but Not Ordinarily Residents / Ordinarily Residents; Non-residents / Residents but Not Ordinarily Residents / Ordinarily Residents / Ordinarily Residents /

Undivided Hindu Family;

Having a net revenue of over 50 lakh rupees;

a company’s director;

Investing in stocks that aren’t publicly traded;

Having revenue from a variety of sources, including wages, multiple house properties, capital returns, and other sources of income;

Having revenue from sources outside of India and properties located outside of India

Individuals / HUFs with a source of income from a company or a career
ITR 3 – Individuals and HUFs of commercial or professional income; include partners in a firm. Individuals or HUFs without a source of commercial or professional profits.
ITR 4 –  Individuals, HUFs, and firms (other than LLPs) with corporate or technical profits calculated on a “presumed basis.” A person who serves as a director of a corporation or owns unlisted stock shares.
ITR 5 – Anyone who isn’t an entity, a HUF, or a corporation filing an ITR 7 (eg. LLP). ITR 7 is filed by a person, a HUF, or a corporation.
ITR 6 – Except expressly omitted, all businesses. Companies who seek to be excluded from paying taxes on charitable or religious trust revenue.
ITR 7 – A charitable or religious trust, a political group, a science research organization, a news agency, a hospital, a trade union, a university, a college, or other organizations such as an NGO or related organizations are all examples of people. There is no other kind of taxpayer.

Which ITR Should You File – FAQs

Q1. Will I have to pay some additional tax while filing my ITR if my salary is still subject to TDS?

TDS on taxes can be different from the real tax liability on the paid income. TDS rates are a proportion of payments that are fixed, while income is charged at slab rates. If the TDS is smaller than anticipated, you will have to pay the remaining tax. You will get a refund if the TDS is too big. You should total the annual revenue from all sources and determine the tax due/claim rebate after filing your ITR.

Q2. Has the ITR filing deadline been extended for AY 2020-21?

The deadline to register an ITR for the fiscal year 2020-21 is January 10th. Because of the pandemic COVID-19, the standard due date has been extended. If you owe a balanced tax of more than 1 lakh, you must pay it by July 31, 2020. If you don’t pay by the deadline, you’ll be charged 1% per month of penalty interest. The penalty interest is in proportion to any interest owed on the tax debt.

Q3. How do I get a tax refund and a TDS refund under Section 87A of the Internal Revenue Code?

If your net revenue after deductions and allowances is less than Rs 5 lakh, you will get a refund on the tax you owe. The highest amount of money you can get back is Rs 12,500. In this scenario, you might be eligible for a refund of the TDS you spent on your earnings.

Q4. May I file an ITR if I have a loss from a job, a home, or the selling of stock?

Yes, you can file an ITR if you have a loss from a company, a stock sale, or interest charged on a home loan. An ITR filing allows you to exclude the deficit and move it on to subsequent years. Keep in mind that you must register your ITR on or before the deadline.

Q5. How will I find out if my IT refund has been processed?

Check the status of your IT refund status at https://tin.tin.nsdl.com/oltas/refund-status-pan.html.

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