Use of Right Income Tax Return Form for The Assessment Year 2013-14

Government has come out with modifications in filing the tax returns based on the income that you earn. This is applicable for the tax returns form the Assessment year 2013-14 relating to the financial year 2012-13. Below are some of the tips for selecting the correct ITR forms. 

ITR-1 Form: -

When to use ITR-1 Form?

ITR–1 Form can be used by an Individual having income from following sources:

•  Income from Salary/ Pension, One House Property (not having brought forward losses from previous years) and Other Sources (not being income from lottery or race horses) such as Interest Income.
• In case any income of spouse, minor child, etc. gets clubbed with the income of the assessee, then ITR–1 can be used only if the clubbed income falls into the above source of income

When not to use the ITR–1 Form?

ITR–1 Form can not be used by an Individual if his total income consists of:

• Income from more than one house property
• Income from Winnings from lottery or income from Race horses
•  Income (not exempt from tax) under Capital Gains 
•  Income exceeding Rs. 5,000 from agricultural business 
•  Income from Business or Profession
• 'Income from stock & equity mutual funds
• Losses which has to be carried forward
• Person claiming relief under section 90, 90A or 91 for foreign tax paid
• An individual who is a resident having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India
• Person having or declared Foreign Financial Asset.

ITR-2 Form:-

When to use ITR-2 Form?

 ITR 2 can be used by an individual or a Hindu Undivided Family (not having Income from business or Profession) whose total income comprises following income:

• Income from Salary / Pension
• Income from House Property
• Income from Capital Gains
• Income from Other Sources (including income from Winning from Lottery and Race Horses)

Moreover, if the income of spouse, minor child, etc. is to be clubbed with the income of the assessee, then ITR 2 can be used only if such income falls in any of the above categories.

When not to use ITR-2 Form?

 ITR 2 is not used by

•  An Individual/ HUFs if his total income includes any income taxable under the head “Profit or Gain from Business or Profession. In other words, business or professional income does not form the part of ITR-2
• The person already using ITR-1 Form. 

ITR-3 Form:-

When to use ITR-3 Form?

A person being an Individual or HUFs who is a partner in a firm shall use ITR-3 form whose income chargeable to income-tax under the head “Profits or gains of business or profession” should not include any income except the income stated below:

•  Interest 
•  Salary
• Bonus
• Commission or
• Remuneration

By whatever name called, due to, or received by Individual or HUF from such firm.

ITR-4 Form:-

When to use ITR-4 Form?

ITR-4 Form can be used by an Individual or HUF who is carrying out a proprietary business or profession and who are not filing Return under Presumptive Taxation Scheme. The following income can be included in ITR-4 form:

• Income from Salary/Pension
• Income or Losses from House property
• Income from Business Profession
• Income or Losses from Capital gains
• Income or Losses from Other Sources

Moreover, every Partnership firms, Individuals & HUF are required to be audited u/s 44AB is required to file their ITR-4 Electronically using digital signature.

When not to use ITR-4 Form?

•  An Individual or a HUF computing business income from Presumptive Taxation Scheme are not eligible to file ITR-4. For Presumptive Business Income, an assessee files ITR-4S (SUGAM).

ITR-4S FORM:-

For Presumptive Business Income an assessee needs to file his return using ITR-4S Form (commonly known as SUGAM).

When to use ITR-4S Form?

ITR-4S Form is applicable on Individuals, HUFs & small business taxpayers deriving income from

• Business income where Presumptive scheme under section 44AD & 44AE of the Act is used for computation of business Income
•  Salary/Pension
• One House Property
• Other Sources

Moreover, in case any income of spouse, minor child, etc. gets clubbed with the income of the assessee, then ITR-4S can be used only if the clubbed income falls into the above income source. Also, the above income will be deemed to be computed after considering every losses, allowances, depreciation, etc.

When not to use ITR-4S Form?

ITR-4S is not applicable if income is derived from

•  More than one House Property 
•  Winning from lotteries/horse races
• Capital gains not exempt from tax
• Agricultural Business in excess of Rs. 5000
• Speculative Business
• Losses to be carried forward 

ITR-5 Form:-

When to use ITR 5 Form?

·         The form can be used by a person being a -

•        Firms
•       AOPs (Association of persons),
•       BOIs (Body of individuals) 
•       LLP (Limited Liable Partnership) 

When not to use ITR 5 Form?

·         The form should not be used by a person being an-

•  Individual
• HUFs
• Company
• And to those persons to whom ITR-7 is being applicable.

ITR-6 Form:-

ITR-6 can be used by a company, other than a company claiming exemption under section 11.

 

ITR-7 Form:-

ITR 7 Form can be used by persons including companies who are required to furnish return under

• Section 139(4A) : Filing return by charitable/Religious trust 
• Section 139(4B) : Filing return by political party
• Section 139(4C) : Filing return by certain Institutions 
•  Section 139(4D) : Filing return by Scientific Research University

Changes in the details to be given in the Income Tax Return Form for the AY 2013-14 relating to the Financial year 2012-13:-

1. Tax Audit Report Filing : The filing of audit reports was made mandatory in ITR Form 5, 6 and 7.
2. Loss from Other Sources: Income-tax Return in the SAHAJ Form (ITR-1) should not have any loss under the head Income from Other Sources. If assessee has such loss then he can use ITR-4.
3. DTAA relief: The SAHAJ Income-tax Return form also cannot be used by an individual claiming any double taxation tax relief under sections 90 or 90 A or 91 of the Income-tax Act, 1961
4. IT PAYABLE <Rs.5,000: The new amendment also comes with the stipulation that whose income tax payable is less than Rs. 5,000, he cannot file ITR-1(SAHAJ) Form.
5. Mandatory E-filing : It is now compulsory for persons having income in excess of Rs. 5 lakhs for the Assessment Year 2013-14 to file their Income-tax Return in the Electronic Form except charitable trusts and educational institutions etc.
6. Details of Assets & Liabilities: A new “Schedule AL” which is introduced in ITR 3 & ITR 4 details of Assets & liabilities of an individual or HUF and It is applicable when the income of the individual or HUF exceeds Rs. 25 lakhs.
7. Electronic submission of Audit Report:The new amendment provides that where the assessee is required to furnish a report of Audit as per section 115AB or 92E or 115JB of the Income-tax Act, 1961, then such audit report shall be furnished electronically with the Income-tax Return.

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