Income Tax Filing For Individuals
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"Filing my ITR used to be a stressful task every year, but FileAbhi made the entire process seamless. Their team guided me step by step, ensuring I got all the deductions I was eligible for. Within just a few days, my return was filed without any errors. Highly recommend their service for anyone looking for a quick and hassle-free tax filing experience!"
— Ronita Singh, Software Engineer
"As a freelancer, I always struggled with tax calculations and deductions. FileAbhi’s team helped me optimize my tax filing, ensuring I paid only what was necessary while maximizing my deductions. Their process was smooth, affordable, and extremely professional. Now, I don’t have to worry about my taxes every year—FileAbhi has got me covered!"
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FileAbhi services on filing: Income tax return for individuals
Filing an Income tax return (“ITR”) is an important responsibility of every earning individual in India. Whether you are a salaried employee, a business owner or a professional, a freelancer, or an investor, timely and accurate filing of your tax return ensures compliance with the Income Tax Department and helps you claim benefits such as refunds and deductions and avoid penalties or interest.
FileAbhi smoothens the entire process by offering professional tax filing services tailored to individuals with different income sources. In this article, we will explain the importance of ITR filing, different ITR forms applicable to individuals, and how FileAbhi can assist in seamless tax filing.
Introduction
Income Tax Act 1961 requires individuals to file their ITR annually to report their income, deductions, and taxes paid during the financial year. This helps in assessing tax liability and ensures compliance with tax laws.
Who needs to File an ITR?
An individual must file an ITR if they meet any of the following criteria:
- Their total income exceeds the basic exemption limit—₹2.5 lakh (for individuals below 60 years), ₹3 lakh (for senior citizens aged 60-79 years), or ₹5 lakh (for super senior citizens aged 80 years and above) for AY 2025-26 (FY 2024-25).
- They seek a tax refund for TDS (Tax Deducted at Source) or advance tax paid during the year. They own foreign assets or have foreign income.
- They have deposited over ₹1 crore in a bank account.
- They have spent ₹2 lakh or more on foreign travel.
- They have spent ₹1 lakh or more on electricity consumption.
Filing ITR on time helps individuals maintain a clean financial record, claim tax refunds, and avoid penalties.
What are ITR forms for individual taxpayers?
The Income Tax Department has prescribed different forms for individuals based on their income sources. Let’s break them down:
1. Individuals with only salary income (ITR-1 or ITR-2)
If you are a salaried employee with no additional income from business or capital gains, you should file either:
- ITR-1 (Sahaj): For individuals with income from salary, pension, and interest (up to ₹50 lakh).
- ITR-2: For individuals with salary income exceeding ₹50 lakh or owning more than one house property.
2. Individuals with salary + Business income
Individuals earning from sources other than salary need to file appropriate ITR forms based on their income type:
a) Salary + Agriculture income (ITR-2 or ITR-3)
ITR-2: If agricultural income exceeds ₹5,000.
ITR-3: If the individual also has business income.
b) Salary + Stock market & mutual fund gains (ITR-2 or ITR-3)
ITR-2: For those earning capital gains from stock trading or mutual funds.
ITR-3: If engaged in intraday trading or F&O trading (considered business income).
c) Salary + Rental/Property income (ITR-2 or ITR-3)
ITR-1: If rental income is from one house property (and total income is under ₹50 lakh).
ITR-2: If income is from multiple properties.
ITR-3: If property is used for business purposes.
d) Salary + Freelancing income (ITR-3 or ITR-4)
ITR-3: If freelancing is the main source of income.
ITR-4 (Sugam): If the income is declared under the presumptive taxation scheme.
e) Salary + Foreign currencies/Bitcoin income (ITR-2 or ITR-3)
ITR-2: If the individual earns capital gains from cryptocurrency investments.
ITR-3: If crypto trading is frequent and considered a business.
Filing the appropriate ITR form is crucial to ensure compliance and avoid errors in tax assessment.
Here is a quick summary of source wise applicable ITR forms
Source of Income | Applicable ITR Forms |
Salary/Pension | ITR-1, ITR-2, ITR-3 |
House property | ITR-1, ITR-2, ITR-3, ITR-4 |
Capital gains | ITR-2, ITR-3 |
Business or Profession | ITR-3, ITR-4 |
Other sources | ITR-1, ITR-2, ITR-3, ITR-4 |
Foreign sources | ITR-2, ITR-3 |
Agricultural income | ITR-2, ITR-3 |
Type of ITR forms
A. ITR-1 (Sahaj)
a. Who can file ITR-1?
- Resident individuals with income from salaries, a single house property, or other sources such as interest.
- The total annual income should not exceed ₹50 lakhs.
b. When not to use ITR-1?
- Non-resident individuals.
- Individuals with capital gains, income from multiple house properties, or income from business/profession.
- Agricultural income exceeding ₹5,000.
Click on this link to access the full form - itr1_english.pdf
B. ITR-2
a. Who can file ITR-2?
- Individuals and Hindu undivided families (“HUFs”) with income from sources such as salaries, more than one house property, capital gains, or foreign assets.
- Taxpayers with agricultural income exceeding ₹5,000.
b. When not to use ITR-2?
- Taxpayers earning income from business or profession.
Click on this link to access the full form - ITR_2_2024_102832.pdf
C. ITR-3
a. Who can file ITR-3?
- Individuals and HUFs earning income from business or profession.
- Professionals such as doctors, lawyers, and architects earning through their practices.
b. When not to use ITR-3?
- Individuals without business or professional income.
Click on this link to access the full form - ITR_3_2024_102833.pdf
D. ITR-4 (Sugam)
a. Who can file ITR-4?
- Individuals, HUFs, and firms (other than LLPs) opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE.
- Taxpayers with total income not exceeding ₹50 lakhs.
b. When not to use ITR-4?
- Taxpayers earning more than ₹50 lakhs or from non-presumptive business sources.
- Non-residents.
Click on this link to access the full form - itr4_english.pdf
3. Importance of getting professional help for filing ITRs
- Choosing the correct ITR form: Selecting the appropriate ITR form depends on the individual's income sources and choosing the wrong form can lead to filing errors or rejections.
- Claiming deductions and exemptions: Taxpayers must accurately claim deductions under sections like 80C, 80D, and HRA exemptions to minimize their tax liability.
- Avoiding errors that could lead to penalties: Mistakes such as incorrect income reporting, missing disclosures, or failing to verify the return can result in penalties, interest, or even scrutiny by tax authorities
Why choose FileAbhi for ITR filing?
- Expert assistance: Our team of tax professionals ensures error-free filing.
- Automated process: Upload your documents, and we handle the rest.
- Maximum refunds: We help you claim all eligible deductions.
- Timely reminders: Never miss an ITR deadline again.
Also Learn: Accounting And Book Keeping Services of FileAbhi
4. Frequently asked questions (“FAQs”)
a. What are different forms of ITR for individuals?
The most commonly used ITR forms for individuals are:
- ITR-1 (Sahaj) – For salaried individuals with income up to ₹50 lakh.
- ITR-2 – For individuals with multiple income sources, including capital gains.
- ITR-3 – For business owners, freelancers, and traders.
- ITR-4 (Sugam) – For individuals under the presumptive taxation scheme.
b. What is the last date of filing ITRs for individuals?
For individuals, the due date for filing ITR is:
- July 31 (for those not requiring audit).
- October 31 (for those requiring audit).
c. How can FileAbhi help in filing ITRs?
FileAbhi offers expert assistance, automated calculations, and document management to ensure hassle-free ITR filing. Our professionals review your income details, apply deductions, and file your return in compliance with tax regulations.
d. Can we file ITRs after the due date?
Yes, individuals can file a belated return until December 31 of the same assessment year. However, late fees and interest may apply.
e. What is the penalty for late filing of ITRs?
- ₹1,000 if total income is below ₹5 lakh.
- ₹5,000 if income exceeds ₹5 lakh.
- Additional interest under Section 234A may apply.
Also Learn: What is GST Registration Certificate
Conclusion
Filing an ITR is not just a legal obligation but a crucial financial responsibility. Choosing the correct ITR form and ensuring accurate filing is vital to avoid penalties and maximize refunds. FileAbhi makes the process simple, efficient, and hassle-free.
Do you need help with ITR filing? Get in touch with FileAbhi today and file your taxes stress-free!