To file Income Tax Returns for 2020-21 know which individual ITR form is applicable

If you are going to file your Income Tax Return (ITR) soon but do not know which is the correct ITR filing form for you, then this news is surely going to help. Remember that anyone who files a wrong ITR form will have to face the consequences.

There are four Income Tax Return (ITR) forms applicable to an individual. Therefore the selection of the correct ITR Filing form is important. 

The wrong selection would result in a receipt of defective notice from the Income Tax Department. If the defect is not removed within the specified time, the ITR will be treated as invalid. Not just that, the person will have to face penalties for the non-filing of ITR.

Four ITR forms applicable :

The four ITR forms applicable to an individual are ITR-1 SAHAJ, ITR-2, ITR-3 and ITR-4.

Details of the ITR forms

ITR-1 (SAHAJ) - Return in Form ITR-1 can be filed by any resident individual (not HUF) having an income of up to 50 lakh rupees. Total income for this purpose includes income from salary or pension, income from one house property, income from other sources such as interest from a bank account (excluding winning from lottery and income from racehorses, income taxable under section 115BBDA or Income of nature referred to in section 115BBE and where agricultural income is up to ₹5,000.

ITR-2 - Individuals and HUFs having a total income of more than 50 lakh rupees. The income should not be from profits and gains of business or profession can file ITR-2. An individual having income from salaries, more than one house property, capital gains and income from other sources, having income from sources outside India and holding assets outside India may file ITR-2. An individual holding directorship in a company may also file ITR-2.

ITR-3 - For Individual and HUF having income from business or profession, or an individual holding partnership in a firm may file ITR-3.

ITR-4 - For Individuals, HUF and Firms (other than LLP) being a resident having total income up to 50 lakh rupees and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE. A person who is a director in a company or has invested in the unlisted equity shares or has any brought forward/ carry forward loss under house property income cannot file the ITR 4.