ITR (Income Tax Return)
An ITR (Income Tax Return) is the annual form filed with India’s Income Tax Department to declare income, claim deductions and compute tax payable or refund.
ITR stands for Income Tax Return. It is the form filed by taxpayers in India with the Income Tax Department to declare their income for a financial year, claim applicable deductions and exemptions, compute their final tax liability, and either pay any balance tax or claim a refund for excess tax already paid (through TDS, TCS or advance tax).
Filing an ITR is an annual obligation for individuals and entities whose income exceeds specified thresholds or who meet certain other conditions.
The Financial Year and Assessment Year
Financial Year (FY): The year in which income is earned, running from 1 April to 31 March. For example, FY 2024-25 runs from 1 April 2024 to 31 March 2025.
Assessment Year (AY): The year in which the return for the previous financial year is filed. AY 2025-26 corresponds to income earned in FY 2024-25. The ITR form always asks for the assessment year.
ITR Forms: Which Form Applies to You?
The Income Tax Department issues different ITR forms for different categories of taxpayers:
ITR-1 (Sahaj)
For resident individuals with:
- Income from salary or pension
- Income from one house property (not a loss carried forward from previous years)
- Income from other sources (interest, dividends — excluding lottery, racehorses, speculative income)
- Agricultural income up to ₹5,000
- Total income up to ₹50 lakh
Cannot use ITR-1 if: you have capital gains, business income, more than one house property, foreign assets or foreign income, are a director in a company, have invested in unlisted equity shares or are a non-resident.
ITR-2
For individuals and Hindu Undivided Families (HUFs) with:
- Income from salary or pension
- Income from capital gains (sale of property, shares, mutual funds)
- Income from more than one house property
- Foreign assets or foreign income
- Agricultural income above ₹5,000
- Total income above ₹50 lakh
- Non-residents
Cannot use ITR-2 if: you have income from business or profession.
ITR-3
For individuals and HUFs with income from a business or profession (including freelancers, consultants, partners in a firm drawing business income, and traders).
ITR-4 (Sugam)
For individuals, HUFs and firms (other than LLPs) who have opted for the presumptive taxation scheme under Section 44AD (business), 44ADA (professionals) or 44AE (transport operators). Designed to be simpler.
Cannot use ITR-4 if: turnover exceeds the presumptive scheme limits, you have capital gains, foreign assets or are a non-resident.
ITR-5
For partnerships, LLPs, AOPs (Association of Persons), BOIs (Body of Individuals) and artificial juridical persons. Not applicable to companies.
ITR-6
For companies other than those claiming exemption under Section 11 (charitable/religious organisations).
ITR-7
For persons (including companies) required to file under Sections 139(4A), 139(4B), 139(4C) or 139(4D) — i.e., trusts, political parties, research associations, and similar entities.
Due Dates for Filing ITR
| Category of Taxpayer | Due Date (without extension) |
|---|---|
| Individuals, HUFs (no audit) | 31 July of the assessment year |
| Individuals/HUFs with business income subject to tax audit | 31 October |
| Companies | 31 October |
| Entities with transfer pricing (international transactions) | 30 November |
Belated return: A return not filed by the due date can be filed as a belated return up to 31 December of the assessment year (with a late fee of up to ₹5,000 under Section 234F — ₹1,000 if income does not exceed ₹5 lakh).
Updated return (ITR-U): Under Section 139(8A), taxpayers can file an updated return (correcting errors or reporting omitted income) up to 2 years from the end of the assessment year, subject to an additional tax of 25% (if filed in the first year after the assessment year) or 50% (in the second year) of aggregate tax and interest.
Why File Even If Income Is Below the Taxable Limit?
Filing an ITR even when income is below the basic exemption limit (₹2.5 lakh for individuals below 60 years under the old regime) is advisable because:
- TDS refund: If your bank or employer has deducted TDS and your actual tax liability is nil, filing a return is the only way to claim that refund
- Loan applications: Banks and financial institutions typically require ITRs for 2–3 years as proof of income for home loans, vehicle loans and business loans
- Visa applications: Many embassies require filed ITRs as part of the income and financial history documentation
- Carry forward of losses: Capital losses (from selling shares, mutual funds or property at a loss) can be carried forward to set off against future gains — but only if an ITR is filed by the due date
- High-value transaction compliance: If you have made high-value transactions (property purchase above ₹30 lakh, deposits above ₹10 lakh), the ITR establishes a formal record of the source of funds
e-Verification
After filing the ITR online, it must be e-verified within 30 days to be considered validly filed. E-verification options include:
- Aadhaar OTP (most commonly used)
- Net banking
- Demat account
- Digital Signature Certificate (DSC) — mandatory for companies
An unverified ITR is treated as not filed at all, even if submitted.