Income Tax Returns (IT Returns)
KAPG & Associates

Income Tax Returns (IT Returns) are forms that taxpayers in India use to declare their income, deductions, and tax liabilities to the Income Tax Department. Filing IT returns is mandatory for individuals and entities who meet certain income thresholds, and it ensures compliance with tax laws while helping the government maintain accurate records of financial activities.

image
icon png

Who Should File IT Returns?


Individuals


  • Individuals with an annual income exceeding the exemption limit (₹2.5 lakh for individuals below 60, ₹3 lakh for senior citizens, and ₹5 lakh for super senior citizens).

  • Individuals with foreign income or assets.

  • Individuals who wish to claim income tax refunds.

  • Individuals who want to carry forward losses to future years.

Businesses: All businesses, regardless of income level, are required to file IT returns.
Companies and Partnerships: Registered companies and partnerships must file annual returns, even if there is no income or profit.

icon png

Importance of Filing Income Tax Returns


Legal Compliance: Filing tax returns is a legal requirement for individuals and businesses earning over a certain income, and non-compliance can lead to penalties.


Proof of Income: Filed returns serve as documented proof of income, which is useful when applying for loans, credit cards, or visas.
Claiming Refunds: If excess tax has been deducted, a taxpayer can claim a refund by filing an IT return.
Loss Carryforward: Filing returns allows taxpayers to carry forward losses to offset future income, which can help reduce tax liabilities.
Access to Benefits: Taxpayers who regularly file IT returns are eligible for various government benefits and schemes.

icon png

Types of IT Return Forms


ITR-1 (SAHAJ): For individuals with income up to ₹50 lakh from salary, pension, one house property, and other sources.


ITR-2: For individuals and HUFs with income from multiple house properties, capital gains, or foreign assets.
ITR-3: For individuals and HUFs with income from a proprietary business or profession.
ITR-4 (SUGAM): For individuals, HUFs, and firms under the presumptive taxation scheme with income up to ₹50 lakh.
ITR-5: For partnership firms, LLPs, and certain associations.
ITR-6: For companies, excluding those claiming exemption under section 11.
ITR-7: For entities claiming exemptions as charitable or religious trusts, political parties, and research institutions.