Which individuals are required to file ITR and which ITR form is to be used?

Varsha Nayyar | Last updated: 26 March 2022

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This article clarifies who is obligated to file an Income Tax Return (ITR) for Assessment Year 21-22. Generally, individuals whose total income exceeds the basic exemption limit (which varies by age) must file. However, filing is also mandatory even if income is below this limit if certain conditions are met, such as significant bank deposits, foreign travel expenditure, or electricity consumption. It also details which ITR form (ITR-1, ITR-2, ITR-3, or ITR-4) is appropriate based on income sources, total income amount, and specific circumstances like business income or capital gains.

Which individuals are required to File ITR for AY 21-22?

Any individual or HUF whose total income before deducting CH VI A deductions and Sec 54/54B/54D/54EC/54F/54G/54GA/54GB is more than the basic exemption limit as specified below-

For individuals below 60 years - Rs 2.5 Lakh
For individuals above 60 years but below 80 years - Rs 3 Lakh
For individuals above 80 years- Rs 5 Lakh

Also, you are mandatorily required to file ITR even if his income is below the basic exemption limit but you Satisfy one of the following conditions:

Have deposited an aggregate amount of more than Rs.1 crore in one or more current bank accounts; or
Have incurred an aggregate expenditure of more than Rs 2 lakh on foreign travel for self or any other person; or
Have incurred an expenditure aggregate of more than Rs.1 lakh towards electricity consumption.

Who Needs to File ITR and Which Form to Use

Also, it is mandatory for residents and ordinary residents person if a beneficial owner or beneficiary of any foreign assets (including any financial interest in any entity) during the FY.

Few voluntary reasons to file ITR

To Claim an income tax refund from the department.
To apply for a visa or a loan

Which ITR form is required to be filed?

ITR-1

Used by Resident Individual Whose Total Income is less than 50 Lakhs and have income under following heads

Income from Salary/ Pension
Income from One House Property (excluding cases where loss is brought forward from previous years)
Income from Other Sources (excluding Lottery Income and Race Horses Income)
Agricultural income up to Rs.5000.

ITR 2

It is for the use of an individual(Being a resident not ordinarily resident (RNOR) and non-resident) or a Hindu Undivided Family (HUF) who cannot file ITR 1 (Including individual whose Total income from the above should be more than Rs 50 Lakhs) and has income under following heads

Income from Salary/Pension
Income from House Property
Income from Other Sources
If you are an Individual Director in a company or had Investments in unlisted equity shares at any time during the financial year
Income from Capital Gains
Foreign Assets/Foreign income
Clubbing of income needs to be done

ITR 3

Can be filed by an individual or a Hindu Undivided Family who cannot file ITR 1 and 2 as they have income from proprietary business or are carrying on profession including Income of a person as a partner in the firm.

This form can be filed if you have presumptive income along with capital gain

ITR 4

ITR 4 is used by individuals and HUFs, Partnership firms (other than LLPs), which are residents and who cannot file ITR 1 and 2 due to the following income:

Business income under presumptive income scheme (Section 44AD or 44AE)
Professional income under presumptive income scheme (section 44ADA)

This ITR cannot be used if you have capital gain Income.

Due Dates for FY 20-21

Non-Audit ITR - *31.12.2021*
Audit ITR - *15.01.2022*
Belated/ Revised ITR - *31.03.2022*

FAQ :

Individuals or HUFs are generally required to file an ITR if their total income, before certain deductions, exceeds the basic exemption limit, which is Rs 2.5 Lakh for those under 60, Rs 3 Lakh for those between 60 and 80, and Rs 5 Lakh for those over 80.

Yes, you must file an ITR if your income is below the basic exemption limit but you have deposited over Rs 1 crore in bank accounts, spent over Rs 2 lakh on foreign travel, or incurred over Rs 1 lakh on electricity consumption.

If your total income is less than Rs 50 Lakhs and you have income from salary/pension, one house property (without brought forward loss), and other sources (excluding lottery/racehorses), you should use ITR-1.

ITR-2 is for individuals or HUFs who cannot file ITR-1, including those with total income over Rs 50 Lakhs, or those with income from house property, capital gains, foreign assets/income, or who are directors in a company or have investments in unlisted equity shares.

ITR-4 is for residents who are individuals or HUFs, or partnership firms (excluding LLPs), with business or professional income under the presumptive income scheme (Section 44AD, 44AE, or 44ADA), provided they do not have capital gains income.

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Comments :

Which individuals are required to file ITR and which ITR form is to be used?

Which individuals are required to File ITR for AY 21-22?

Few voluntary reasons to file ITR