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Sunday, June 30, 2013

Which Income Tax Return(ITR) form should I file for AY 2015-16 (FY 2014-15)?

Income Tax department has unveiled the income tax return forms for the Assessment Year 2015-16 (Financial Year 2014-15). The main intention has been to simplify the ITR forms and make them user friendly. Many of the salaried class have been used to file SARAL (Form 1). However, this year, better be careful.
Those who avail HRA, have availed LTA or had any other "exempted income" more than Rs. 5,000 in the entire year, you better find out what form you are required to file...read on...

What are the available forms and which form is applicable for me?
Following are the available forms for tax return filing for the Financial Year 2014-15 (AY 2015-16). Applicability of these forms depends on tax payer’s source of income. It is thus important to know the relevance of each of these forms.

ITR-1 Form (Sahaj)

Among the salaried this is one of the most widely used income tax return forms. It is the simplest form, and the easiest to submit without any complications.

Who can use this form:
a) You have income from salary.
b) You have Income from One House Property 
c) You have income from other sources like interest income.

Who cannot use this form:
a) You own more than one house property.
b) You have 'loss' brought forward from previous years.
c) You have income from other sources includes winning from lottery and income from race horses.
d) You earn agricultural income exceeding Rs 5,000
e) You have income under the head 'Capital Gains'.
f) You earn any exempted income in excess of Rs. 5,000 (Please look at a later section in this post - "What is Exempt Income" for more details)
g) Income from Business or Profession
h) You are claiming relief for foreign tax paid
i) You own a financial asset outside India.

Those who are not eligible to fill this form may file the newly introduced ITR-2A or ITR-2.


ITR-2A Form
This is the new income tax return form which has been introduced in the current assessment year 2015-16. 

Who can use this form:
a) You have salary income
b) You may own more than one house property and earn income from house property, but do not have any capital gains arising out of themEarlier, those who owned more than one house property had to file ITR-2 whether or not they had capital gains. Now such taxpayers can file ITR-2A which is much shorter form than ITR-2.
c) You have earned long-term capital gains from sale of shares on which STT (securities transaction tax) is paid, since these are exempt from tax.
d) You have income from other sources including winning from lottery and income from race horses.
e) You earn agricultural income even if it is exceeding Rs 5,000/-
e) NRIs can also file this form if they meet the above listed conditions

Who cannot use this form:
aYou have 'loss' brought forward from previous years.
b) You have income under the head 'Capital Gains' (of your house property).
c) Income from Business or Profession
d) You are claiming relief for foreign tax paid
e) You own a financial asset outside India.


ITR-2 Form
This form used to exist earlier as well.

Who can use this form:
a) You have salary income
b) You may own more than one house property and earn income from house property, c) c) You have earned 'capital gains' arising out of sale of any of your houses. 
d) You have earned long-term capital gains from sale of shares on which STT (securities transaction tax) is paid, since these are exempt from tax.
e) You have income from other sources including winning from lottery and income from race horses.
f) You earn agricultural income even if it is exceeding Rs 5,000/-
gYou have 'loss' brought forward from previous years.
h) You are claiming relief for foreign tax paid
i) You own a financial asset outside India.
j) NRIs can also file this form if they meet the above listed conditions

Who cannot use this form:
a) There is partnership income (ITR-3)
b) business income (ITR-4 or ITR-4S)

ITR-3 Form
This Return Form is to be used by an individual or an Hindu Undivided Family who is a partner in a firm and where income chargeable to income-tax under the head “Profits or gains of business or profession” does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm. In case a partner in the firm does not have any income from the firm by way of interest, salary, etc. and has only exempt income by way of share in the profit of the firm shall use this form only and not Form ITR-2.


ITR-4 Form
This form is applicable, both, to Individuals and HUFs who carry out any business or professional activity in addition to having sources of income applicable to ITR-3.


Sugam ITR (4S)

This form is for a special case ITR, and it is applicable for small businessmen and professionals covered under presumptive taxation. This is a special scheme of the Income Tax Department. Those who opt for this scheme don't have to maintain accounting records. ITR-4S is a very simple return.

As per the presumptive method, net income is estimated to be 8 per cent of gross receipts or Rs 7,500 per month for each vehicle where the taxpayer plies, leases or hires trucks.


ITR-5 Form

This Form can be used a person being a firm, AOP, BOI, artificial juridical person referred to in section 2(31) (vii), cooperative society and local authority. However, a person who is required to file the return of income under section 139(4) (a) or 139(4) (a) or 139(4) (b) or 139(4) (c) or 139(4) (d) shall not use this form


ITR-6 Form

This Form can be used by a company, other than a company claiming exemption under section 11.


ITR-7 Form
This Form can be used by persons including companies who are required to furnish return under section 139(4A) or under section 139(4B) or under section 139(4C) or under section 139(4D).


What is Exempt Income?
Section 10 of the Income Tax act is specifically dedicated to grant various exemptions to assessees of all class on Incomes earned by them. 


Some of the most common exempted incomes for an individual that fall under this head are as below. If your total income (which was tax exempted and paid to you) in this financial year is more than Rs. 5,000/-, you need to file ITR-2 or ITR-4 depending on whether you are salaried class or business professional respectively.

Since most of the salaried class would have more than Rs. 5,000/- as tax exempt income, they should all file ITR-2 starting this year.

What are Sahaj and Sugam Forms?
SAHAJ is essentially your ITR 1 Form, simplified for straightforward salaried cases, which form a majority of the salaried tax payers chunk.
SUGAM is your ITR 4S for presumptive business cases, which forms a majority of small businesses.
These are the first technology enabled Tax Payer Friendly Forms in the country. “Sahaj'' and ''Sugam'' aimed at reducing compliance burden on salaried persons and small businessmen.

From where can i download the forms?
You should download the forms and the instructions only from the Income Tax India gov website
Here is the link : http://incometaxindia.gov.in/download_all.asp

Please make sure that you download the correct forms for the correct Financial Year / Assessment Year since the website has forms for last 5 years.

What are the due dates?
31st July is usually the due date for filing of Income Tax Returns, unless specifically notified by the Income Tax department. Since the IT department has been late in releasing the forms this year, the due date for filing of Income Tax Returns this year has been extended to 31st Aug 2015.



Cheers

Manoj Arora
Freedom can buy you.... what money cannot !!

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