There are various Income Tax Return Forms that taxpayers can use, depending on the source of Income and some other factors. Here we will tell you which ITR Form is supposed to be used by whom.
File Income Tax Return using correct Form
From 1st April 2018, new ITR Forms were launched by the Central Board of Direct Taxes.
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ITR-1 Form or Sahaj
ITR-1 Form is the simplest form and is used by maximum number of taxpayers. It is filed by individual taxpayers. The new ITR-1 Form requires the detailed break up of your salary, that include details of allowances that are not exempt, value of perquisites, profit in lieu of salary and other deductions.
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ITR-2 Form & ITR-3 Form
Taxpayers who furnish these ITR-2 or ITR-3 Form will now be required to provide a detailed calculation of the capital gains, providing details of the actual sales consideration, Fair Market Value (FMV) as determined in a prescribed manner and thereafter the deemed value of consideration, whichever shall be higher among the two. Moreover, those who want to claim investment-based exemption, new columns have been introduced in the respective forms for furnishing details like date of sale of original capital asset and the amount of exemption claimed for each capital gain separately.
Filing Income Tax Return
This Form is generally filed by the taxpayers who have income from business. The new ITR-4 Form seeks more information than the earlier one. The previous ITR-4 Form majorly focused on the four particulars of Business and they are total creditors, total debtors, total stock-in-trade and cash balance. The new ITR-4 Form seeks information about some additional financial particulars like amount of secured/unsecured loans, advances, fixed assets, capital account, etc. Moreover, it also requires the taxpayers to provide the aggregate turnover as reported by him/her in the GST return filed by him/her. With GST returns connected to the ITRs submitted to the Income Tax Department, manipulation of turnover will not be possible, which is seen as a big blow by the tax evaders.
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