The Income Tax Department has finally officially released Income Tax Return (ITR) Forms 1, 2, 3, 4, and 5 for the financial year 2024-25. ITR-1 and ITR-4 were notified on April 29. Whereas, ITR-3 was released on April 30. After this, ITR-5 was previously notified on May 1, and finally ITR-2 on the May 3. Now the question is, who should fill which ITR form? Let’s ease your confusion.
ITR-1 (Sahaj)
This form is for those people whose total annual income is up to the ₹ 50 lakh. The source of income in this can be salary/pension, income from one house property, interest on savings or FD, and agricultural income up to a maximum of ₹ 5000. This form is not for those who are directors of a company or who have invested in unlisted shares. If someone has foreign income or assets or whose capital gains income is more than the prescribed limit, then they also cannot file it. This is a simple and ‘sahaj’ option for those whose sources of income are limited and straightforward.
ITR-2 Form
This form is especially for those who earn income from salary or pension, or who have more than one house property. If you have earned the capital gains by selling something like the shares, mutual funds, or the property, then you need to have to fill out the ITR-2 form only. If your annual income is more than ₹ 50 lakh or you have assets abroad, then it is necessary to fill the ITR-2 form instead of ITR-1. It is designed for those whose financial situation is a little complex.
ITR-3 Form
ITR-3 form is used by people who earn money from business or profession and who have to maintain detailed account books. This form is especially to be filled by professionals like doctors, lawyers, and chartered accountants. If you run your own any type of business or are the professional and you have to keep the detailed account of your income and the exact expenses, then this form is for you.
ITR-4 (Sugam)
This form is for individuals and HUF (Hindu Undivided Family). If your income is from your business or any profession like doctor-lawyer, those who run a partnership firm (other than LLP), those who earn income under section 44AD and 44AE, and whose income from salary or pension is more than ₹ 50 lakh, they fill this form. If you are a freelancer but your annual income is more than ₹ 50 lakh, then you can also fill this form. This is a ‘Sugam’, i.e. easy option for small businessmen and professionals.
ITR-5 Form
ITR 5 is for organisations that have registered themselves as a firm, LLP (Limited Liability Partnership), AOP (Association of Persons), BOI (Body of Individuals). This form is also used for the association of persons and the body of individuals. If you are associated with an organisation that falls under these categories, you need to fill out the ITR-5 form.