Returns and ITR Forms Applicable for Salaried Individuals for AY 2021-22

Hello Friends as we know that income tax return due date filing is approaching. So we are here to tell you 1.)What Is Income Tax Return ? and 2.) Who needs to file Income Tax Return? 3.)Which form is applicable for F.Y 2020-21(A.Y 2021-22).

1. Income Tax Returns

These are the forms in which Assessee/ Individual files information about his/her Income and tax applicable/refund on those income to Income Tax Department. Income Tax Return helps individuals helps in determining their self-assessment tax and refund if there is any excess tax has been deducted. Before filing ITR everyone should be Know that who needs to file ITR Mandatorily and which form is applicable on them.

2. Who needs to file Income Tax Return Mandatorily or obligation by law?

Individuals who fulfill any one of the following conditions should be liable to file their Income Tax Returns during a financial year:

i. Individuals whose gross total income (before any deductions exceeds ₹2.5 lakh in respective Financial Year or ₹3 lakh for senior citizens or ₹5 lakh for super senior citizens).

ii. Companies or firms irrespective of whether they have income or loss during the financial year.

iii. Assessee who want to carry forward a loss under a head of income.

iv. Assessee who want to claim an income tax refund.

v. If you have deposited ₹ 1 crore or more in one or more current accounts maintained with either bank or cooperative bank during the respective year.

vi. If you have Incurred expenditure of an amount or aggregate of amount exceeding ₹ 2 lakhs for travel to a foreign country for yourself or for any other person.

vii. If you have paid Electricity bills of amount or aggregate of amount exceeding ₹ 1 lakh on consumption of electricity during the respective year.

viii. Residents and signing authorities in a foreign account. (Not applicable to NRIs or RNORs).

ix. Resident individuals who have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs).

x. Foreign companies taking treaty benefit on a transaction in India.

xi. NRIs, who have income that exceeds ₹2.5 lakhs in Financial Year which is earned or accrued in India.

xii. Those who derive income from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust are required to file an income tax return in India.

Disclaimer: The above list is only to give an overview and general guidance and is not exhaustive. For complete details and guidelines please refer to Income Tax Act, Rules and Notifications.

3. Forms Applicable for Salaried Individuals for F.Y 2020-21 (AY 2021-22)

1. ITR-1 (SAHAJ) – Applicable for Individual

This form is for Individuals who have earned their Income during the respective year through the below-mentioned sources:

i. Income earned through Salary or Pension
ii. Income earned through One House Property (except in case of losses brought forward from preceding years)
iii. Income earned through agriculture (not more than Rs.5,000)
iv. Total income earned can be a maximum of Rs.50 lakhs and not more
v. Income earned through other sources other than Lottery, Racehorses, and Legal Gambling etc. Other sources include Interest, Family Pension, Dividend etc

In case of clubbed Income Tax Returns, where a spouse or a minor income is included in the tax returns, this can be done only if their income too is limited to the specifications mentioned above.

ITR-1 (SAHAJ) – Non-eligible individual for ITR-1

Individuals who have earned Income through the following means are not eligible to fill the ITR-1 (SAHAJ)

i. Income earned through more than one House Property
ii. Income earned through Lottery, Racehorses, Gambling etc.
iii. Income earned through taxable capital gains, either Short term or Long term
iv. Income earned through agriculture exceeding Rs. 5000
v. Income earned through Business and Professions
vi. who has any brought forward loss or loss to be carried forward under any head of income
vii. Person in whose case tax has been deducted u/s 194N
viii. Total income earned more than Rs 50 lakhs
ix. If any Resident Individual who has any Income from any source outside India or has any
asset outside India or has signing authority in any account located outside India

2. ITR-2 – Applicable for Individual and HUF

This form is for Individuals and Hindu Undivided Family (HUF)who have earned their Income during the respective year through the below mentioned sources

i. Income earned through more than one House Property
ii. Income earned through Lottery, Racehorses, Gambling etc.
iii. Income earned through taxable capital gains, either Short term or Long term
iv. Income earned through agriculture exceeding Rs. 5000
v. who has any brought forward loss or loss to be carried forward under any head of income
vi. Person who is a Director in a company
vii. Total income earned more than Rs 50 lakhs
viii. Person in whose case tax has been deducted u/s 194N
ix. Person in whose case payment or deduction of tax has been deferred on ESOP
x. Investment were made in unlisted equity shares at any time during the respective year
xi. If any Resident Individual who has any Income from any source outside India or has any asset outside India or has signing authority in any account located outside India

ITR-2 – Non-eligible individual and HUF for ITR-2

i. Any Individual or Hindu Undivided Family whose income, is earned either through a Business or a Profession
ii. Individuals who are eligible to fill the ITR-1 SAHAJ form

3. ITR-3- Applicable for Individual and HUF

This form is applicable to those Individuals and Hindu Undivided Family (HUF) who have earned their Income during the respective year through the below mentioned sources:

i. Who is a Partner in a firm
ii. Having Income under the head Profits and Gains of Business or Profession
iii. Who is not eligible for filing ITR-1, 2 or 4

4. ITR-4 (SUGAM) – Applicable for Individual, HUF and Firm (other than LLP)

This Form is applicable to those individual and Hindu Undivided Families having Total Income up to ₹ 50 lakhs and income from Business or Profession who want to declare their income from Business or Profession under Presumptive Income Scheme of Income Tax under Section 44AD ,Sec 44ADA and Section 44AE of the Income Tax Act and income from any of the following sources:

i. Income earned through Salary or Pension
ii. Income earned through One House Property
iii. Income earned through agriculture (not more than Rs.5,000)
iv. Total income earned can be a maximum of Rs.50 lakhs and not more
v. Income earned through other sources other than Lottery, Racehorses, and Legal Gambling etc. Other sources include Interest, Family Pension, Dividend etc

ITR-4 – Non-eligible individual and HUF and Firm for ITR-4

i. Income earned through more than one House Property
ii. Income earned through agriculture exceeding Rs. 5000
iii. who has any brought forward loss or loss to be carried forward under any head of income
iv. Person who is a Director in a company
v. Total income earned more than Rs 50 lakhs
vi. Person in whose case payment or deduction of tax has been deferred on ESOP
vii. Investment were made in unlisted equity shares at any time during the respective year
viii. If any Resident Individual who has any Income from any source outside India or has any asset outside India or has signing authority in any account located outside India

Disclaimer :

This information is shared by author only for knowledge purposes. In no event the author shall be liable for any direct, indirect, special, or incidental damage resulting from or arising out of or in connection with the use of this information

Compiled By : CA Amrish Aggarwal

Email Id: Amrish.aggarwal [email protected]