The tax filing season is here and many of us often get confused as to what ITR form we should be filing. See, the ITD issues 7 ITR forms and the applicability of these forms are based on two things,
- The type of taxpayer
- The sources of Income
In case of individuals like us, any one of the first four forms will be applicable. The rest are for entities like LLPs, companies, and other associations.
Now, to decide the right form for you, you’ll have to ask a few questions.
- What is my total income for the year?
- What are my sources of income?
If your answer to the first question is more than ₹50 lakhs, you cannot file ITR-1 and ITR-4. Hence, you will have to go for either ITR-2 or ITR-3 based on what income you have.
The table below lists the forms along with the income sources.
Here’s a video to know all about Income Tax Returns!
If you still have doubts, you can reply below and we will help you out!
Hi I have just started trading this year and am currently in small loss which I would technically want to carry forward. I file my returns under section 44AD as i run a home business and make some income out of it and usually file ITR 4. How do i go about it this year with my capital loss?
Hey @Siddy24,
You can file ITR 3. Here, you can report your trading losses under ‘business income’. If the losses are from F&O trading, they can be set off against all incomes except salary in the current year. If the losses are from intraday trading, they can only be set off against intraday gains. If you don’t have enough income to set off all the losses, they’ll be carried forward.
You can continue to report your other business under the ‘presumptive taxation scheme’ even in ITR-3.
Hope this clarifies.
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Thanks for answering. Doesn’t ITR 3 require book keeping details and ask for additional details. I couldn’t find where to show presumptive income in ITR 3. It keeps asking for balance sheet and income statement items
Hi,
ITR-3 is for reporting business income and you can report two businesses simultaneously. You can opt presumptive taxation scheme for one of your businesses and declare the same under ‘schedule PL (Profit & Loss)’ while filing.
Hope this helps!
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I am a retired person having income from Bank interests and from stockmarket investment (Equities and F&O). No other income rent or pension. Which ITR form should I submit.
Hey @Ponnusamy,
Based on the income sources you mentioned, you’ll have to file ITR-3. This is because profits/losses from F&O trading are considered business income and such income needs to be reported in ITR-3. Here, you can also report your interest income and capital gains from stock market.
Hope this helps!
My Daughter is working in a private firm on salary basis and also getting little income as freelancer (Professional income). Which ITR shall be filed FY2024-25. Kindly advice
Hi @Srikanth,
For declaring this income your daughter needs to file ITR-3 or ITR-4 (If opting for the presumptive taxation scheme).
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Thank you maam. Greatly appreciated
Dear Team,
If a resident individual has total income exceeding Rs 50 lakhs, then ITR1 cannot be used by that person.
My query is about “total income” in the above. This not just refer to only “taxable income” right?
Can you clarify me, whether “total income” refers to " Gross Total Income" reflecting at B4 (i.e., B1+B2+B3) row of Part B sub section in ITR 1 form?
In form 16 does the gross salary minus standard deduction will be considered as gross total income if a resident individual has only income from salary and if this gross total income is less than 50 lk rupees then resident individual can choose ITR1?
Example in FY 2023-2024 AY 2024-2025,
If a resident individual getting salary from employment and income from other sources (i.e., FD interest, saving account interest, and SGB interest) in FY. In ITR 1 Part B under B4 gross total income is showing sum of both gross salary and income from other sources excluding standard deduction u/s 16 (iva). So this B4 amount is gross total income and if this is less than 50 lakh rupees then the resident individual can file ITR1 otherwise if this B4 gross total income is more than 50 lakh rupees he can file ITR2.
Please confirm my above understanding is correct in choosing ITR 1 and ITR2 for a resident individual with salary and other sources of income in above scenario.
Thank you!
Hey @money369 ,
Let’s resolve the queries one by one:
-
Total income refers to the amount remaining after claiming all eligible deductions. You should compare your income situation with this total income.
The ₹50 lakh limit for using ITR-1 applies to this total income, not the gross total income shown in row B4, as this amount is before deductions.
-
Yes, gross salary less standard deduction is considered as gross total income. If this value if less than ₹50L then he/she can file ITR-1
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For AY 2025–26, the ITR form you should file depends on your income type. Most salaried individuals with income up to ₹50 lakh can use ITR-1 (Sahaj). If you have business income, capital gains, or foreign assets, consider ITR-2, ITR-3, or ITR-4 based on specifics.
