Income Tax Return: The Income Tax Return (ITR) filing season for the financial year 2024-25 has started from 1 April 2025. Taxpayers are required to file their ITR by 31 July, otherwise they may have to face penalty and other problems.
The Income Tax Department has released all forms from ITR-1 to ITR-7 for the financial year 2024-25 (Assessment Year 2025-26). It is important to understand which category you fall into, so that you can choose the right ITR form according to your income source and entity type. This greatly reduces the chances of your return being rejected.
Let us understand which ITR form is suitable for taxpayers in India:
1. Individual
Who: Individual taxpayers such as salaried employees, freelancers or other professionals.
Taxation: Tax is levied as per the income slab. There are different tax rates for normal citizens, senior citizens (60–80 years) and super senior citizens (above 80 years).
ITR Forms:
ITR-1 (Sahaj): For salaried employees with income up to Rs 50 lakh.
ITR-2: For capital gains or those with more than one property.
ITR-3: For those with income from business/profession.
ITR-4 (Sugam): For those with presumptive income under section 44AD, 44ADA or 44AE.
2. Hindu Undivided Family (HUF)
Who: A family with common ancestors, treated as a separate entity.
Taxation: Same rates as for individual taxpayers, plus certain exemptions.
ITR Form:
ITR-2, ITR-3 or ITR-4 (depending on the source of income).
3. Company
Who: Private or public limited companies registered under the Companies Act.
Taxation: Flat corporate tax rates apply. Minimum Alternate Tax (MAT) is also applicable in certain cases.
ITR Form:
ITR-6 (not for companies claiming exemption under section 11).
4. Firm
Who: Partnership firms, including Limited Liability Partnerships (LLPs).
Taxation: Flat tax rate of 30% on total income plus surcharge and cess is applicable.
ITR Form: ITR-5
5. Association of Persons (AOP) / Body of Individuals (BOI)
Who: Groups of people or bodies that come together for a common purpose.
Taxation: Depending on specific situations, either the individual tax rate or the maximum marginal rate is applicable.
ITR Form: ITR-5
6. Local Authority
Who: Municipalities, panchayats and other local bodies.
Taxation: Income from commercial activities is taxable. Certain sources of income are exempt.
ITR Form: ITR-5
7. Artificial Juridical Person (AJP)
Who: Entities that do not fall into any of the above categories – such as trusts, societies and others.
Taxation: Tax rate is determined based on income and entity type.
ITR Forms:
ITR-5: For general AJPs.
ITR-7: For entities claiming exemptions under sections 11, 12 etc. – such as charitable trusts.
It is very important to choose the right ITR form as per the income source and entity type. This not only makes it easier to comply with tax rules, but also reduces the chances of the return being rejected due to any mistake.
