Income Tax Return Filing: How to Choose the Right ITR Form?

To help you avoid one of the most common mistakes here are details on how to choose the right ITR form for financial year 2017-2018 and assessment year 2018-2019.

The new income tax return (ITR) forms have been notified and you might have already got Form 16 from your employer. But before you sit down to file income tax return (ITR) do you know what is the most common mistake while filing ITR. It happens at the first step while selecting the ITR form. The confusion arises from the fact that there are seven ITR forms depending on what kind of income you have. It is important to select the correct ITR form as wrong selection can get your ITR form rejected by the Income Tax Department.

To help you avoid one of the most common mistakes here are details on how to choose the right ITR form for financial year 2017-2018 and assessment year 2018-2019.

Who can File ITR-1 (Sahaj)

If your source of income is salary (including pension), one house property or income from other sources than you need to fill ITR 1 or Sahaj form. But the form only applies to people whose total income does not exceed Rs50 lakhs. Moreover, if there is any agriculture income, it should not exceed Rs5,000.

Who can File ITR-2

Apart from sources of income mentioned in ITR 1, if you also have capital gains and foreign income than ITR 2 is applicable. ITR-2 also applies to people with total income of more than Rs50 lakh. It is for taxpayers who have agriculture income of more than Rs5,000.

Who can File ITR-3

If you also earn business income over and above the sources of income mentioned in ITR2 than you need to fill ITR-3 for the financial year 2017-2018.

How to choose ITR Forms for AY 2018-19?

ITR-1	ITR-2	ITR-3
Salary/Pension	Everything from ITR-1	Income from Business/Profession including Income from Partnership firm
One House Property	Income >50lac	All incomes covered under ITR -2
Other Sources	Capital Gains
Total Income not exceeding 50 lac	Foreign Income
Agriculture Income< ₨5000	Agriculture Income> ₨5000
Source: ATMS & Co

Who can File ITR-4

ITR 4 is for people such as doctors and engineers who opt for presumptive income. For example: a small businessman with a turnover of less than Rs 2crore can declare profits at 8% of gross receipts and 6% in case of digital receipts.  A doctor and an engineer who earns in excess of Rs 50 lakhs can opt for presumptive income. The form also includes income from other sources, income from salary and income from house property.

Who can File ITR-5

ITR 5 is filed by people other than individual, HUF, Company and on whom ITR-7 is applicable. ITR-5 is applicable on firms, LLPs, AOPs and BoIs.

How to choose ITR Forms for AY 2018-19?

ITR-4	ITR-5	ITR-6	ITR-7
Presumptive Business Income of Individual, HUF and Firm under:	Other than Individual, HUF, Company and person filing ITR-7	Companies not claiming exemption under section 11	Person/companies required to furnished return under:
Section 44AD, 44ADA, 44AE			Section 139(4B)
Other Sources			Section 139 (4C)
Income from Salary			Section 139 (4D)
Income from House Property			Section 139 (4E)
			Section 139 (4F)
Source: ATMS & Co

Who can File ITR 6

It is applicable to companies not claiming exemption under section 11. Companies claiming exemption under section 11 are those whose income from property is held for charitable or religious purposes.

Who can File ITR-7

ITR-6 is filed when persons including companies fall under section 139(4A) or section 139 (4B) or section 139 (4C) or section 139 4(D), Section 139 (4E) and Section 139 (4F). The section includes people who derive their income from property held under trust for charitable or religious purposes, a political party, a scientific research association, news agency, university, college, hospital or other medical institution.