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



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.

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Chartered accountant

Practicing Chartered Accountant since November 2018

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