Choosing the Right ITR Form Based on Your Income Source

Filing your Income Tax Return (ITR) is a key financial responsibility for taxpayers in India. Many taxpayers get confused about which ITR form to use because different forms apply to different income types. Picking the correct form based on your income source is important for a smooth filing process, accurate income reporting, and tax compliance.

This article breaks down the various ITR forms and helps you determine which one fits your income type for the Assessment Year (AY) 2024–25.

What is an Income Tax Return (ITR)?

An Income Tax Return is a document filed with the Income Tax Department declaring your total income, deductions, and taxes paid during the financial year. It enables the government to assess your tax liability and ensure proper tax payment.

Types of Income and Applicable ITR Forms

The Income Tax Department offers multiple ITR forms tailored to different types of income. Here’s a brief overview of income categories and the relevant forms:

1. Income from Salary or Pension

If your earnings are primarily from salary, pension, or family pension without any business or professional income:

• ITR-1 (Sahaj):
  For individuals with income up to ₹50 lakh from salary or pension, one house property, and other sources such as interest or dividends. This is the simplest form, often used by salaried taxpayers.
• ITR-2:
  For those whose income exceeds ₹50 lakh or who have capital gains or income from multiple house properties. This form excludes business or professional income.

How to Select the Appropriate ITR Form

• Identify Your Income Sources: List all income streams such as salary, business profits, capital gains, rental income, etc.
• Check Income Limits and Eligibility: For example, use ITR-2 if your salary income is above ₹50 lakh instead of ITR-1.
• Consider Presumptive Taxation: Business taxpayers opting for presumptive income can use ITR-4 for simpler filing.
• Factor in Other Considerations: Complex situations like audit requirements or foreign assets may require ITR-2 or ITR-3.

Documents Required for Filing

• PAN and Aadhaar
• Employer-issued Form 16 (for salaried individuals)
• Bank and interest statements
• TDS certificates and Form 26AS
• Financial statements (for business/profession)
• Capital gains documents
• Investment proofs for claiming deductions

Important Deadlines for AY 2024–25

• 31st July 2025: For taxpayers not requiring audit
• 31st October 2025: For those who need to file audited accounts

Filing after deadlines may result in penalties, so timely submission is important.