Which ITR You Should Opt for AY 2017-18?

Every year CBDT notifies new income-tax return (ITR) forms. In 2016 the CBDT had notified the ITR Forms at the end of March, 2016 and it deviated from its past practice of notifying ITR Forms in the month of May or June. This time also the CBDT has notified the ITR forms in the month of March, 2017.

As per the assurance given by the Finance Minister in his Budget Speech the CBDT had finally prescribed simplified ITR 1 Form with fewer columns. However, such ITR 1 is applicable only for individuals having income up to Rs 50 lakhs. Further, Individual taxpayers either having dividend income above 10 lakhs or having unexplained credit (taxable at 60% under Section 115BBE) can’t opt for ITR-1.

The CBDT has scrapped ITR- 2A. Now all assessees (other than those earning salary income and business income) would be required to file ITR-2 only.

Earlier taxpayers opting for presumptive taxation were required to file ITR-4S. But now they are required to file ‘ITR-4 SUGAM’ for presumptive income. Taxpayer earning income from business or profession are now required to file ITR-3 instead of old ITR-4.

Applicability of ITR forms is given hereunder:

Individual and HUF
Nature of income ITR 1 (Sahaj) ITR 2 ITR 3 ITR 4
Income from salary/pension
Income from one house property (excluding losses)
Income or losses from more than one house property
Agricultural income exceeding Rs. 5,000
Total income exceeding Rs 50 lakhs
Dividend income exceeding Rs10 lakhs taxable under Section 115BBDA
Unexplained credit or unexplained investment taxable at 60% under Sections 68, 69, 69A, etc.
Income from other sources (other than winnings from lottery and race horses or losses under this head)
Income from other sources (including winnings from lottery and race horses)
Capital gains/loss on sale of investments/property
Share of profit of partner from a partnership firm
Income from business or profession
Income from presumptive business
Income from foreign sources or Foreign assets or having Signing authority in any account outside India
Claiming relief of tax under sections 90, 90A or 91
Other Assessees ITR 5 ITR 6 ITR 7
Firm (including limited liability partnership firm)
Association of Persons (AOP)
Body of Individuals (BOI)
Companies other than companies claiming exemption under Sec. 11

Persons including companies required to furnish return under:

(1) Section 139(4A);

(2) Section 139(4B);

(3) Section 139(4C); and

(4) Section 139(4D)

ITR-1

Who can file return in ITR 1?

Return in ITR 1 can be filed by an individual, if his total income includes:

(a) Salary or pension

(b) Income from one house property (except brought forward loss under this head)

(c) Income from other sources (except winnings from lotteries or income from horse races or losses under this head)

Who can’t file return in ITR 1?

Return in ITR 1 cannot be filed by an individual if he:

a) Is resident and ordinarily resident and has, –

– An asset (including financial interest in any entity) located outside India; or

– Signing authority in any account located outside India; or

– Income from any source outside India.

b) Has claimed any relief under Section 90 or Section 90A or Section 91A

c) Has agricultural income above Rs 5000

d) Has total income above Rs 50 lakhs

e) Has dividend income above Rs 10 lakhs taxable under Section 115BBDA

f) Has unexplained credit or investment taxable at 60% under Section 115BBE.

g)Has income from more than one house property

h) Has income from winning from lottery or horse race

i) Has losses under the head income from other sources

J) Has income under the head capital gains or business or profession

ITR-2
Who can’t file return in ITR 2? Return in ITR 2 cannot be filed by an individual and HUF if he/it has income chargeable to tax under the head ‘Proprietory business or profession’
ITR-3

Who can file return in ITR 3

ITR 3 can be filed by an Individual or HUF deriving income from proprietary business or profession.

ITR 3 can also be filed by an Individual or HUFwho is a partner in a firm deriving his income by way of any interest, salary, bonus, commission or remuneration from firm.

ITR-4 SUGAM

Who can file return in ITR 4 SUGAM?

Return in ITR 4 can be filed by an individual of HUF or a Firm (other than a limited liability partnership firm) if his total income includes:

(a) Presumptive Income computed as per the provisions of section 44AD, 44ADA and 44AE and,

(b) Salary or pension or

(c) Income from one house property (except brought forward loss under this head) or

(d) Income from other sources (except winnings from lotteries or horse races or losses under this head)

Who can’t file return in ITR 4 SUGAM?

Return in ITR 4 cannot be filed by a person who:

a) Is resident and ordinarily resident and has, –

– An asset (including financial interest in any entity located outside India; or

– Signing authority outside India; or

– Income from any source outside India

b) Has claimed any relief under Section 90 or 90A or Section 91.

c) Has agricultural income above Rs 5000

d) Has dividend income above Rs 10 lakhs taxable under Section 115BBDA

e) Has unexplained credit or investment taxable at 60% under Section 115BE

f) Has income from agency business or commission or brokerage

g) Has income from profession as referred to in Section 44AA.

h) Has income from more than one house property

i) Has income under the head capital gains

j) Has income from speculative business and other specified business.

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