Filing income tax returns is a crucial duty for every taxpayer in India.
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Selecting the right form ensures adherence to tax laws and facilitates precise income reporting.
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Here are some factors to help you choose the right ITR form:
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Nature of Income
Categorize your income into salary, house property, capital gains, business or profession, and other sources. Choose ITR forms tailored to specific types of income.
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Residential Status
Determine your residential status under the Income Tax Act (resident, non-resident, or resident but not ordinarily resident). Select forms based on your residential status.
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Income Thresholds
Note income thresholds for different forms. For example, ITR-1 is limited to individuals with total income up to ₹50 lakhs.
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Owning Foreign Assets
If you have foreign assets or income, choose forms that allow for their declaration, such as ITR-2 or ITR-3.
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Presumptive Taxation
If eligible for presumptive taxation under Sections 44AD, 44ADA, or 44AE, opt for ITR-4 (Sugam).
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Audit Requirement
Determine if your accounts need to be audited under the Income Tax Act. Select the appropriate ITR form based on audit requirements.