There are basically two categories of applicants:
1. Individuals / HUFs
2. Others.

1. Individuals and HUFs

ITR 1
This form can be used only by an individual having a salary and interest income. Form ITR-1 cannot be used if the individual has any income under other heads like:

a. Property rental income

b. Capital gains

c. Dividend income from shares of foreign companies (which income is not tax free in India)

d. Winning from lotteries or any other prize money

Thus, even under the head “Income from Other Sources”, if the taxpayer has any income other than interest income then he cannot use ITR 1. The IT department websites offers two versions of ITR 1 — Version 1 is two pages and Version 2 is three pages — though honestly the font size seems to be the only difference between the two.

It may be noted that this form is likely to be of use to a very limited number of taxpayers since most salaried taxpayers have income from other heads as well as income from sources other than interest (which would be chargeable to tax under the head ‘Income from Other Sources’). Therefore, one can only wonder about the actual utility of this form.

ITR 2
This form has to be used by Individuals/ HUFs having income from any source other than business or professional means. Thus, this form is to be used if, besides salary and interest income, the Individual / HUF has income from house property or capital gains (short or long term), or income from other sources. This is probably one that most salaried professionals will be using.

This form is 12 pages long. But don’t get alarmed. Out of the 12 pages, six pages are only by way of guidance notes. The actual form is only six pages long.

ITR 3

ITR 4
The last, ITR 4, is to be used by Individuals/ HUF having a proprietary business or profession. Thus, any person who has his own business/profession (even if he is also a partner in a partnership firm), then he would have to use ITR 4. This form is 30 pages long with 10 pages of guidance notes.

2. Others

ITR 5
This form is to be used by Firms/ AOPs/ BOIs to file their returns. It is a 22-page Form with 30 schedules to it. In addition, there are 10 pages of guidance notes to help taxpayers fill up the form. Apart from the details of the income and tax, this form requires the taxpayer to fill in details of the FBT. ( Fringe Benefit Tax)

ITR 6
This form is to be used by companies to file their returns. It is a 24-page form with 34 Schedules to it. This form replaces the earlier Form no 1. In addition to 24 pages, there are nine pages of guidance notes to help taxpayers in filling up the form. Apart from the details of the income and the tax, this form also requires the taxpayer to fill in details of the FBT.

ITR 7

ITR 8
This form is to be used by those who are liable to file returns for fringe benefits and not the Return of Income. It is a four page form with three additional pages of guidance notes.

So, Am I succeeded in confusing or clarifying? If it’s the latter then my is done. The above should help you to select the form which is most appropriate for you and that is half the battle won for paying your tax. The other half of course is finding creative ways to save your tax! Lets leave that for another article.

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