Which ITR should a company file?

Navigate the complexities of income tax filing for companies. Discover the right ITR form tailored to your business needs.

Overview

Explore various Income Tax Return (ITR) forms catering to diverse entities. From ITR-1 to ITR-7, each form serves specific entities, ensuring accurate and streamlined tax filing. For companies or individuals, understanding the nuances of ITR-7, ITR-6, ITR-5, ITR-4, ITR-3, ITR-2, ITR-1, and ITR-7 is essential for effectively fulfilling taxation obligations. This overview provides insights into the distinct purposes and applicability of each ITR form, facilitating a smooth and compliant tax return filing process for various entities. Learn Which ITR should a company file?

What is ITR?

ITR stands for Income Tax Return, a form you submit to the Indian Income Tax Department annually to disclose your income earned during the previous financial year (April 1st to March 31st). It acts as a tool for the government to assess your tax liability and ensure all income is declared and accounted for.

Why Should You ITR Company File?

Filing your ITR is crucial for several reasons:

• Compliance: ITR company file is mandatory if your income exceeds the government’s specific threshold. Failing to do so can lead to penalties and other legal consequences.
• Tax Refunds: Filing an ITR is your key to claiming any tax refunds you might be entitled to due to overpaid taxes or deductions.
• Loan and Visa Applications: Many banks and embassies require your recent ITRs as proof of income and financial stability when processing loan or visa applications.
• Building Trust: Regularly ITR company file creates a positive track record with the tax department, promoting transparency and reducing future scrutiny.

ITR-1 (SAHAJ):

• Purpose: For individuals with salary, interest, house property, and agricultural income up to Rs. 5,000.
• Eligibility: 
  • Resident individuals with a total income below Rs. 50 lakhs.
  • Individuals do not have capital gains, income from business/profession, foreign assets/income, or directorship in a company.

ITR-2:

• Purpose: For individuals with income from salary, house property, capital gains, other sources, and foreign assets/income
• Eligibility: 
  • Resident individuals with a total income exceeding Rs. 50 lakhs.
  • Individuals with income from sources not covered in ITR-1, such as capital gains or foreign assets

ITR-3:

• Purpose: For individuals and Hindu Undivided Families (HUFs) with income from business or profession.
• Eligibility: 
  • Individuals/HUFs with income from business or profession.
  • Individuals/HUFs with income from sources covered in ITR-1 or ITR-2, along with business/professional income

ITR 4 Form (Sugam):

• Purpose: For individuals, HUFs, and firms (other than LLPs) with presumptive income from business and profession.
• Eligibility: 
  • Individuals/HUFs/firms with presumptive income from business/profession.
  • Total income below Rs. 50 lakhs (for individuals/HUFs) or Rs. 2 crores (for firms)

ITR-5:

• Purpose: For Limited Liability Partnerships (LLPs) and partnership firms.
• Eligibility: 
  • LLPs and partnership firms registered under the Indian Partnership Act, 1932

ITR-6:

• Purpose: For companies not claiming exemption under Section 11 of the Income Tax Act.
• Eligibility: 
  • Companies that are not claiming exemption under Section 11.
  • Companies that have not entered into any international transaction or specified domestic transaction.

ITR-7:

• Purpose: For companies, including those claiming exemption under Section 11.
• Eligibility: 
  • All companies, including those claiming exemption under Section 11.
  • Companies that have entered into international transactions or specified domestic transactions.

ITR Forms

• You fill out these forms to declare your income and calculate your tax liability.
• Different ITR forms are designed for different types of taxpayers and income sources.
• Common examples include: ITR-1 (SAHAJ), ITR-2, ITR-3, ITR-4 (Sugam), ITR-5, ITR-6, and ITR-7.

 Form 16

• Issued by your employer as a certificate of tax deducted at source (TDS) from your salary.
• Contains details of your salary, allowances, deductions, and the total TDS amount.
• It’s a crucial document for filing your ITR, as it helps verify your income and TDS information.

Form 26AS:

• A consolidated annual tax statement is available on the Income Tax Department’s website.
• Reflects all taxes deducted at source (TDS) and collected at source (TCS) against your PAN.
• It includes details from Form 16 and TDS on other income like interest, dividends, and rent.
• It’s essential to reconcile this statement with your records for accuracy before filing your ITR.

Form 15G and Form 15H:

• These forms are self-declarations for claiming a lower or no tax deduction on certain incomes.
• Form 15G: Used by individuals whose estimated total income is below the taxable limit.
• Form 15H: Used by senior citizens (aged 60 or above) whose estimated full payment is below the taxable limit.
• You can avoid unnecessary TDS deductions by submitting these forms to banks or other institutions.

FAQs