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Understand the different types of ITR forms and their applicability.
ITR Form | Applicable For | Who Should File? |
---|---|---|
ITR-1 (Sahaj) | Individuals with income up to ₹50 lakh | Salaried individuals, pensioners, rental income, interest income |
ITR-2 | Individuals & HUFs not having income from business | Income from capital gains, multiple house properties, foreign income |
ITR-3 | Individuals & HUFs with business or profession income | Professionals, freelancers, business owners |
ITR-4 (Sugam) | Presumptive income scheme (up to ₹2 crore) | Small business owners, freelancers, professionals under presumptive tax |
ITR-5 | Partnership firms, LLPs | Businesses other than individual & HUF |
ITR-6 | Companies (except those claiming exemption under Section 11) | Private limited companies, public limited companies |
ITR-7 | Entities required to file under Sections 139(4A) to 139(4D) | Trusts, political parties, charitable institutions |
Filing income tax returns is not just a legal obligation but also offers numerous financial and legal benefits. Here are some key advantages:
1. Easy Loan Approvals: Filing ITR acts as proof of income and helps in getting quick approvals for loans such as home, car, and personal loans.
2. Faster Visa Processing: Many embassies require ITR receipts for visa applications, making the verification process easier.
3. Proof of Income: ITR serves as a legal document that validates your income and financial stability.
4. Claim Tax Refunds: Filing your returns ensures you can claim refunds on any excess tax deducted at source (TDS).
5. Avoid Penalties: Timely tax filing helps prevent penalties imposed by the Income Tax Department for non-compliance.
6. Carry Forward Losses: Taxpayers can carry forward their losses and adjust them against future profits, reducing tax liability.
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