Understanding the Applicability of ITR Forms for FY 2023-24 (AY 2024-25)
Introduction:
Filing income tax returns (ITR) is an essential responsibility for every taxpayer. It helps the government assess individuals' tax liabilities and ensures compliance with tax regulations. Each financial year (FY) is associated with a corresponding assessment year (AY), during which taxpayers file their ITR. In this blog, we will explore the applicability of ITR forms for FY 2022-23, also known as AY 2023-24, and provide a comprehensive understanding of the different forms available.
ITR Forms and their Applicability:
The Income Tax Department of India has designed various ITR forms to cater to the different types of income and categories of taxpayers. The applicable ITR form depends on the nature and amount of income earned, as well as the individual's residential status. Let's discuss the primary ITR forms for FY 2022-23 (AY 2023-24) and their applicability.
ITR-1 (Sahaj):
ITR-1 is the most straightforward form and is applicable to individuals being a resident (other than not ordinarily resident) having total income up to Rs. 50 lakhs. It covers income from salary, one house property, other sources (excluding winning from lottery and racehorses), and agricultural income up to Rs. 5,000. If you have income from more than one house property or have capital gains or foreign assets, ITR-1 may not be suitable.
ITR-2:
ITR-2 is applicable to individuals and Hindu Undivided Families (HUFs) not having income from profits and gains of business or profession. It includes income from salary, house property, capital gains, and other sources. If you are a resident with income from a business or profession, or if you are a director of a company, you need to file ITR-3 or ITR-4.
ITR-3:
ITR-3 is applicable to individuals and HUFs having income from profits and gains of business or profession. It covers income from salary, house property, capital gains, and other sources, along with income from business or profession as per the prescribed tax audit limit.
ITR-4 (Sugam):
ITR-4 is applicable to individuals, HUFs, and firms (other than Limited Liability Partnerships) having presumptive income from business or profession. It is suitable for individuals with turnover up to Rs. 2 crores under the presumptive taxation scheme.
ITR-5:
ITR-5 is applicable to partnership firms, limited liability partnerships (LLPs), association of persons (AOPs), and body of individuals (BOIs). It also includes entities such as estates and trusts.
ITR-6:
ITR-6 is applicable to companies other than those claiming exemption under section 11 (income from property held for charitable or religious purposes).
ITR-7:
ITR-7 is applicable to persons, including companies, who are required to furnish a return under sections 139(4A), 139(4B), 139(4C), or 139(4D) (i.e., trusts, political parties, institutions, colleges, etc.).
Choosing the Right ITR Form:
Selecting the correct ITR form is crucial as it ensures accurate reporting of income and prevents any complications during the assessment process. It is recommended to thoroughly understand the nature of your income and consult a tax professional if needed. The Income Tax Department's e-filing portal provides detailed instructions and guidance to assist taxpayers in choosing the appropriate form.
Important Dates and Filing Procedures:
For FY 2023-24 (AY 2024-25), the due dates for filing ITR forms may vary based on the taxpayer's category. Typically, the deadline for filing ITR is July 31st of the assessment year for person not required to Audit and 30 Oct for those who required to get Audited under income tax Act. However, it is advisable to stay updated with the official announcements by the Income Tax Department to ensure compliance with the latest guidelines.
Filing ITR forms is an integral part of fulfilling one's tax obligations and ensuring compliance with the Income Tax Act. Understanding the applicability of different ITR forms for FY 2023-24 (AY 2024-25) is crucial for taxpayers to avoid errors and penalties. It is recommended to carefully assess your income sources, seek professional guidance if required, and file your ITR within the specified timelines. By doing so, you contribute to the nation's development and maintain a transparent financial record.
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