Applicability of ITR forms for individuals, HUF & firms on the basis of certain factors

Geetanjali Pandey | Last updated: 10 June 2023

Save Share

Quick Summary

Choosing the correct Income Tax Return (ITR) form is crucial for individuals, Hindu Undivided Families (HUFs), and firms. This guide breaks down the applicability of different ITR forms based on factors like residency status, income sources, and total income. It helps taxpayers determine whether they should use ITR-1, ITR-2, ITR-3, or ITR-4.

Which ITR Form to Use Individuals, HUFs and Firms Guide

APPLICABILITY OF ITR FORMS FOR INDIVIDUAL, HUF & FIRMS ON THE BASIS OF CERTAIN FACTORS
Particulars	ITR-1	ITR-2	ITR-3	ITR-4

Type of Person	Individual only	Individual & HUF	Individual & HUF	Individual, HUF & Firm

Exception for Individual	Not for an Individual who Director in a co. Invest in unlisted equity shares Income tax is deferred on ESOP. Tds u/s 194N Agricultural income is more than Rs. 5000	N.A	N.A	Not for an Individual who Director in a co. Invest in unlisted equity shares Income tax is deferred on ESOP. Agricultural income is more than Rs. 5000

Residential status	Resident Individual only other than not ordinarily resident	Resident, Non-resident & Not Ordinarily resident	Resident, Non-resident & Not Ordinarily resident	Resident only

Sources of Income	Salary Income from one House Property Other Sources Reporting of exempt income BUT agricultural income upto Rs. 5000	Salary Income from more than one House Property Capital Gain Other Sources Reporting of exempt income	Salary Income from one House Property Capital Gain Business Income (including presumptive also) Other Sources Reporting of exempt income	Salary Income from one House Property Business Income opted for Sec 44Ad, 44ADA & 44AE Other Sources Reporting of exempt income BUT agricultural income upto Rs. 5000.

Particulars	ITR-1	ITR-2	ITR-3	ITR-4
Total Income	Total Income upto Rs. 50 lakh	No Limit and where Total income exceed Rs. 50 lakh, (assets and liabilities schedule) need to be filled.	No Limit and where Total income exceed Rs. 50 lakh, (assets and liabilities schedule) need to be filled	Total Income upto Rs. 50 lakh

Exception in the case of certain Income & tax relief.	Not for an Individual where Income of specified person included in the Total Income of an individual as per Sec 64 and Schedule SPI need to be filled. Having Foreign Income for which Schedule FSI & FA need to be filled. Income from transfer of virtual digital asset which is taxable under the head “Capital Gain ” Special income which is taxable at special rate and for which Schedule SI need to be filled. (for e.g winning from lottery, puzzles taxable @30%) Where tax relief is to be claimed in respect of Foreign Income u/s 90, 90A & 91.	N.A	N.A	ITR-4 not eligible where, For Individual where Income of specified person included in the Total Income of an individual as per Sec 64 and Schedule SPI need to be filled. ITR-4 not eligible For Individual, HUF & Firm where Having Foreign Income for which Schedule FSI & FA need to be filled. Income from transfer of virtual digital asset which is taxable under the head “Capital Gain ” Special income which is taxable at special rate and for which Schedule SI need to be filled. (for e.g winning from lottery, puzzles taxable @30%) Where tax relief is to be claimed in respect of Foreign Income u/s 90, 90A & 91.

FAQ :

ITR-1 is for resident individuals only, with a total income up to Rs. 50 lakh. It's not for individuals who are directors in a company, have invested in unlisted equity shares, have deferred ESOP income, or have agricultural income exceeding Rs. 5000.

ITR-4 is for individuals, HUFs, and firms who are residents and have a total income up to Rs. 50 lakh. It's suitable for those opting for presumptive income schemes under Sections 44AD, 44ADA, and 44AE.

ITR-1 is not for individuals with specific conditions like being a company director or having deferred ESOP income. ITR-4 is not eligible for individuals with income of specified persons included in their total income, foreign income, or income from virtual digital assets.

If you have capital gains as a source of income, you would typically use ITR-2 or ITR-3. ITR-3 is also for those with business income, including presumptive business income.

If your total income exceeds Rs. 50 lakh, you generally cannot use ITR-1 or ITR-4. For ITR-2 and ITR-3, you will need to fill the assets and liabilities schedule.