We are fast approaching July 31, the due date of filing income tax returns (ITRs) for the previous financial year i.e. FY 2015-16 or assessment year 2016-17. If you have not filed your income tax return till now and you think you are filing it late, don’t be disheartened. I think more than 80% ITRs get filed during the last ten days before the due date. But, don’t be lazy anymore, file it today itself and stay relaxed.
In the next 2-3 days, I’ll try to write a couple of posts covering some important aspects of ITR filing. In this post, I have covered various ITR forms which are applicable to you as an individual or your HUF depending on various sources of income you have.
Which ITR form is applicable to you?
ITR 1 (SAHAJ) – For Individuals having Salary Income or Pension Income, Interest Income from various investments and/or Rental Income from only one house property.
If you have a self-occupied house property and there is a home loan for which you are paying EMIs, you can claim benefit under section 24 for the payment of interest on your home loan. However, if you have more than one house property, whether self-occupied, let-out or vacant, this form is not applicable to you. Moreover, if you have agricultural income of more than Rs. 5,000 and/or income from capital gains, whether taxable or tax-exempt, then also you cannot use this form. In all such cases, you are required to use either ITR 2 or ITR 2A. Please note, HUFs cannot use ITR 1.
ITR 2A – For Individuals or HUFs having Income from various sources including Salary, House Property and/or Income from Other Sources, but other than Income from Business or Profession, Capital Gains and Foreign Assets.
In case you have more than one house property and/or have agricultural income more than Rs. 5,000, then you can use this form.
This is an extended version of ITR 1, seeking a little more information as compared to ITR 1, but a lot less than ITR 2. If you have taxable income from short term capital gains either on equity shares or mutual funds or income from foreign assets or any kind of business income, then you cannot use this form. Use either ITR 2 or ITR 4 instead.
ITR 2 – For Individuals or HUFs having Income from various sources including Salary, House Property, Capital Gains and/or Income from Other Sources, but other than Income from Business or Profession.
If you have Income from Capital Gains or if you have income from more than one house property or if your income from other sources is negative or if you have income from any of your foreign assets, then you need to use this form to file your ITR.
ITR 3 – For Individuals or HUFs being Partners in Firms, but not carrying out any Business or Profession in the name of any Proprietorship Firm.
This form can be used by an individual or HUF even if he/she has taxable income from other sources or has income from foreign assets or agricultural income more than Rs. 5,000.
ITR 4S – For Individuals or HUFs or Partnership Firms having Income from a Presumptive Business. In other words, if your business income is taxable on some presumptive or predefined basis, then this form is applicable to you.
You cannot use this form if you have more than one house property or have taxable income from capital gains or agricultural income of more than Rs. 5,000 or income from foreign assets.
ITR 4 – For Individuals or HUFs having Income from a Proprietorship Firm, apart from any other source of income.
Checklist of Documents required to file ITR
* Form 16 (For Salaried Employees)
* Form 26AS
* Bank Statement for FY 2015-16 i.e. from April 1, 2015 to March 31, 2016
* 80C Investment Proofs
* Other Receipts for Claiming Tax Benefits, such as 80D, 80CCD (1B) etc.
* Home Loan Annual Statement having Interest & Principal Bifurcation
* Last year’s ITR
* Balance Sheet, P&L Account and other Audit Reports wherever applicable
* Other Applicable Documents
I’ll try to cover the following topics in the next 2-3 days.
Tax Treatment of Derivatives Trading
In case you think there is something more interesting to cover, please suggest.