The time to file income tax continues. All taxpayers in the country have the opportunity to file it before July 31. If any taxpayer files it after July 31, he will have to pay a penalty of Rs 5,000. The thing to keep in mind is that this time too there are thousands of taxpayers who are filing ITR for the first time. Many times they file ITR without correct information and then have to face the ITR notice. When the department sends the notice, they get worried. In such a situation, it becomes important for every taxpayer to know which ITR form each category of taxpayer needs to fill.
ITR-1 is for employed people
If you are a salaried person and your total income for the financial year 2020-21 is up to Rs 50 lakh, you will need to fill the ITR-1 form. Please note that pension income is also included in salary.
If you have also earned income from other sources like interest on bank deposits and house property, you can still file your return through ITR-1 form. With this, even if you have agricultural income up to Rs 5,000, you can use ITR-1 to file your return.
read this too
These people should fill ITR-2
If your salary income is more than Rs 50 lakh, you can use ITR 2. Now ITR-2 can be used even if you have income in the form of capital gains, income from more than one house or income from abroad or own assets abroad. If you hold the position of director of any company or own unlisted shares, you must use ITR-2 to file returns.
Who is ITR-3 best for?
This form is intended for entrepreneurs and professionals who do not receive any salary income. Even if you are a partner in a company, you must use the ITR-3 form.
Who can file the ITR-4?
ITR-4 can be availed by both resident individuals and HUFs who have earned income from their profession or business in the previous financial year but wish to adopt Presumptive Income Scheme (PIS) for computing their income tax liability. As per Sections 44AD, 44AE and 44ADA of the Income Tax Act, 1961, it can be availed by businesses whose total turnover is less than Rs 2 crore. It can also be availed by eligible professionals whose total income during the last financial year is less than Rs 50 lakh. The biggest advantage of opting for PIS is that there is no need to maintain books of accounts,
Under the PIS system, companies can estimate their net income at a rate of 6 percent of total turnover. This can be done if all receipts have been received through digital payment methods. In the case of cash payments, this rate will be 8 percent. On the other hand, professionals such as doctors, lawyers, architects and interior designers who opt for the PIS must declare 50 percent of total income during the year as profit and pay the corresponding taxes. However, both entrepreneurs and professionals can voluntarily declare their income at a rate higher than that required by the system.
