Choosing Right ITR Form is Crucial, Make Sure You File the Correct One

As the ITR Deadline is approaching soon, approximately 4.56 crore taxpayers have filed their ITRs. Income Tax Department officials are advising taxpayers to file ITR as soon as possible and should not wait till the last minute to file their returns. However, taxpayers are allowed to file delayed ITR till the year-end, but these delayed filings will attract penalties depending on the duration of the delay.

Income Tax Return Filing has been made simple and easy so that more individuals can file their own return without having to ask others.

Steps to file ITR:

Step 1: Here’s how an individual can file ITR easily:

Step 2: Visit the official Income Tax website (incometax.gov.in).

Step 3: Log in using PAN/Aadhaar and password.

Step 4: Go to the e-file section and then select Income Tax Return and then File Income Tax Return.

Step 5: Choose Assessment year 2025-26.

Step 6: Select the appropriate applicable form.

Step 7: Re-check pre-filled information and details such as bank details, TDS, salary, interest and others.

Step 8: Add missing income/deduction and select a suitable tax regime – Old or New.

Step 9: Lastly, submit the return.

The Income Tax Department announces various ITR forms every year according to various categories of taxpayers. And choosing the right form is essential for taxpayers because filling in an incorrect form may provide the inappropriate return.

For financial year 2024-25 (AY 2025-26), the following forms are applicable to non-audits, such as individuals and small entities:

ITR-1 (Sahaj)

ITR-1 is for salaried individuals, and as per the Income Tax Department salaried individual is a taxpayer who is chargeable under the head “Income from Salary” and whose income is earned from an employer in the form of salary, wages, perquisites, pensions or allowances.

ITR-2

ITR-2 is for Individuals and HUFs having no business/profession Income. And as per the Income Tax Department Individuals are natural persons who earn income from salary, pension, house property, business/profession, capital gains or other sources and are taxed in their personal capacity. And Hindu Undivided Families (HUFs) are separate entities under income tax law, including all persons directly descended from a common ancestor, such as their wives and unmarried daughters. An HUF can earn income from property, business or other sources and it is taxed as a different person.

According to the Central Board of Direct Taxes (CBDT), there has been a growth of over 25 per cent in ITR filings between 2022-23 and AY 2024-25. For AY 2024-25 around 7.28 crore ITRs were filed up to July 31, 2024, But compared to last AY 2023-24 6.77 crore ITRs were filed.

If a taxpayer missed filing ITR before the deadline, then he/she may face the following penalties and consequences:

• if your total income exceeds Rs. 5 lakh, you may have to pay Rs. 5,000.
• if your total income is within Rs. 5 lakh, you may have to pay Rs. 1,000 and
• Interest at a rate of 1% per month