Income Tax
Return Filing
Salaried, business, capital gains, LLP, company, trust — every taxpayer type, every ITR form. Plus revised returns, belated filings, and the 2-year ITR-U window to correct past mistakes. CA-assisted, accurate, and filed on time.
ITR Form Selector — Quick Reference
| Form | Who Should File | Income Sources Covered | Who Cannot Use |
|---|---|---|---|
| ITR-1 | Resident individual — salary / pension only | Salary, one house property, other sources, agri income ≤ ₹5,000 | Director in company; ESOP; foreign income; total income > ₹50L; more than one house property |
| ITR-2 | Individual / HUF — no business income | Salary, multiple house properties, capital gains, foreign income/assets, lottery, crypto | Business or profession income — use ITR-3 instead |
| ITR-3 | Individual / HUF with business / profession income | Business profit, professional fees, salary, house property, capital gains, all other sources | Presumptive income taxpayers who opt for ITR-4 (but can always use ITR-3 instead) |
| ITR-4 | Individual / HUF / Firm (not LLP) opting for presumptive | Business income under Sec 44AD, profession under 44ADA, transport under 44AE | Director in company; ESOP; foreign income / assets; total income > ₹50L; capital gains |
| ITR-5 | LLP, Partnership Firm, AOP, BOI, Local Authority | All income sources applicable to the entity type | Individuals, HUFs, Companies, entities filing ITR-7 |
| ITR-6 | Companies other than those claiming 11/12 exemption | All income of a company including business, capital gains, other income | Companies claiming exemption under Sec 11/12 (charitable purposes) — use ITR-7 |
| ITR-7 | Trusts, NGOs, political parties, universities, research institutions | All income with exemption claims under Sec 11, 12, 13A, 10(23C) | Commercial entities; trusts not registered under 12A/12AB |
ITR-1 — Salaried Individuals
Resident individuals with salary, pension, one house property & other sources — total income up to ₹50 lakh
✅ Who CAN File ITR-1
- Resident individual with salary or pension income
- Income from one house property (self-occupied or let-out)
- Income from other sources — interest (savings, FD), dividends
- Agricultural income up to ₹5,000
- Total income does not exceed ₹50 lakh
- Income from family pension
🚫 Who CANNOT File ITR-1
- Total income exceeds ₹50 lakh
- Director in any company during the year
- Received ESOPs from employer
- More than one house property
- Capital gains income (equity, property, mutual funds)
- Foreign income, foreign assets, or NRI
- Business or profession income
- Loss carried forward from prior years
💡 Key Deductions to Claim
- Section 80C — LIC, PPF, ELSS, home loan principal, tuition fees (up to ₹1.5L)
- Section 80D — Medical insurance premium (up to ₹25,000 self; ₹50,000 senior parents)
- Section 80CCD(1B) — NPS contribution (additional ₹50,000)
- Section 24(b) — Home loan interest (up to ₹2L for self-occupied property)
- Standard deduction — ₹75,000 from salary (AY 2025-26 onwards)
- Section 80TTA / 80TTB — Interest deduction on savings account
⚠️ Common Mistakes in ITR-1
- Not declaring all interest income (FDs, savings accounts across all banks)
- Missing Form 26AS / AIS entries — pre-filled data often incomplete
- Wrong selection between Old vs New tax regime without comparison
- Not declaring employer's EPF contribution in salary (if > ₹7.5L/year)
- Forgetting dividend income from mutual funds / stocks
- Claiming HRA exemption without proper rent receipts
Documents Required for ITR-1
ITR-2 — Capital Gains & Multiple Income Sources
Individual / HUF with capital gains, multiple house properties, foreign income, or income above ₹50 lakh
✅ Who Should File ITR-2
- Capital gains — sale of equity shares, mutual funds, property, crypto, bonds
- More than one house property (rental income from multiple properties)
- Foreign income, foreign assets (NRI / resident with foreign investments)
- Director in a company (even if no remuneration)
- Total income exceeds ₹50 lakh (but no business income)
- Lottery, gambling, horse racing income
- Investment in unlisted shares
📊 Capital Gains Tax Rates (AY 2025-26)
- STCG on listed equity / equity MF (Sec 111A) — 20%
- LTCG on listed equity / equity MF (Sec 112A) — 12.5% above ₹1.25L
- LTCG on property / unlisted shares (Sec 112) — 12.5% (without indexation)
- STCG on property / debt MF — slab rates
- Crypto / Virtual Digital Assets — 30% + 1% TDS (Sec 115BBH)
- Grandfathering for equity LTCG — assets held before 31 Jan 2018
Capital Gains Reporting Has Become Complex — Pre-Filled Data Is Incomplete
AIS now pre-fills some capital gains data from broker reports — but this is often incomplete, misclassified (STCG vs LTCG), or missing grandfathering calculations for pre-2018 equity. TaxClue reconciles the AIS capital gains data against broker contract notes, applies correct grandfathering values, and computes the exact LTCG offset available — minimising your tax liability while ensuring accurate reporting.
Documents Required for ITR-2
ITR-3 — Business & Professional Income
Individual / HUF with income from business or profession — regular books-of-accounts basis (non-presumptive)
✅ Who Files ITR-3
- Freelancers / consultants with professional income
- Proprietors running a business with regular accounts
- Doctors, lawyers, architects, CAs with professional income
- Business + salary income in the same year
- Business + capital gains in the same year
- Any individual opting out of presumptive taxation
- Partner in a firm (share of profit from firm is reported here)
📋 What ITR-3 Requires
- Balance sheet and profit & loss account for the year
- Schedules: assets, liabilities, debtors, creditors
- Details of all income — business, salary, capital gains, other
- Tax audit report (Form 3CA/3CB + 3CD) if turnover exceeds threshold
- MAT / AMT computation if applicable
- Depreciation schedule as per Income Tax Act
- Partner's remuneration and interest (if partner in firm)
Business Expense Deductions — Get Every Rupee
ITR-3 filers are entitled to deduct all genuine business expenses: rent, salaries, professional fees, depreciation, travel, insurance, repairs, and more. TaxClue reviews your P&L to ensure all allowable deductions are claimed — including depreciation on assets at prescribed rates — reducing your taxable business income before computing the final liability.
Documents Required for ITR-3
ITR-4 — Presumptive Taxation Scheme
Individuals, HUF, and firms opting for presumptive income under Sec 44AD, 44ADA, or 44AE
💰 Presumptive Scheme Rates
- Sec 44AD — Business: Declare minimum 8% of turnover (6% for digital receipts) as income. No need to maintain books. Eligible for turnover up to ₹2 Crore (₹3 Crore if 95%+ digital).
- Sec 44ADA — Specified Professions: Doctors, lawyers, engineers, architects, CAs, consultants — declare minimum 50% of gross receipts. No books needed. Eligible up to ₹75 Lakh receipts (₹1.5 Cr if 95%+ digital).
- Sec 44AE — Transport: Per vehicle per month — ₹1,000 for heavy vehicles, ₹7,500 for others.
⚠️ Conditions & Restrictions
- Cannot claim deductions beyond standard deductions and Chapter VI-A
- If declared income is lower than the prescribed percentage, audit under Sec 44AB is mandatory
- Once opted out of 44AD, cannot re-enter for 5 years
- Cannot file ITR-4 if: director in company, ESOP, foreign income/assets, total income > ₹50L
- Cannot file ITR-4 if capital gains income exists
- Advance tax — one instalment due by 15 March (100%)
Documents Required for ITR-4
ITR-5 — LLP, Partnership Firm, AOP & BOI
Non-individual, non-company entities — LLP, partnership firms, AOPs, BOIs, local authorities
✅ ITR-5 Covers
- LLPs (Limited Liability Partnerships)
- Partnership firms (registered or unregistered)
- Association of Persons (AOP)
- Body of Individuals (BOI)
- Artificial juridical persons
- Co-operative societies
- Local authorities
📋 Key Tax Provisions
- Partners' share of profit — not taxable in partners' hands (exempt u/s 10(2A))
- Remuneration to partners — deductible subject to Sec 40(b) limits
- Interest to partners — deductible up to 12% per annum (Sec 40(b))
- AMT @ 18.5% applicable if regular tax is lower
- Presumptive taxation (44AD) available for eligible firms
- No surcharge on basic tax rate for partnership firms / LLPs
Documents Required for ITR-5
ITR-6 — Companies
All companies except those claiming exemption under Section 11 or 12 (charitable purposes)
📊 Corporate Tax Rate Structure
- New companies (mfg, after Oct 2019): 15% u/s 115BAB
- New domestic company (no exemptions): 22% u/s 115BAA
- Existing company (turnover ≤ ₹400 Cr in FY 2021-22): 25%
- Other domestic companies: 30%
- Surcharge: 7% (income ₹1–10 Cr), 12% (above ₹10 Cr)
- Health and Education Cess: 4% on tax + surcharge
- MAT @ 15% applicable if regular tax < MAT
📋 Key Compliances with ITR-6
- Tax audit by CA under Sec 44AB — mandatory for companies
- Statutory audit under Companies Act (before ITR filing)
- MAT computation on book profits (Ind AS / IGAAP)
- Transfer Pricing documentation (Form 3CEB) if international transactions
- Country-by-Country report (Form 3CEAA) for large MNCs
- Deemed dividend / buyback provisions
- Carry forward of losses — specify nature and year-wise
Documents Required for ITR-6
ITR-7 — Trusts, NGOs & Institutions
Entities filing under Sec 139(4A), 139(4B), 139(4C), 139(4D) — trusts, NGOs, political parties, universities
✅ Who Files ITR-7
- Religious or charitable trusts registered under Sec 12A / 12AB
- NGOs, societies, foundations with Section 11 exemption
- Political parties (Sec 13A)
- Educational institutions and hospitals (Sec 10(23C))
- Research associations approved under Sec 35
- Companies registered under Sec 8 (non-profit companies)
⚠️ Critical Compliance Points
- Application of income — minimum 85% of income must be applied to charitable purposes to claim full exemption
- Accumulation beyond 5 years — must invest in specified modes (Sec 11(2))
- Violation of Sec 13 — transactions with related parties invalidate full exemption
- 12A / 12AB registration renewal — now requires periodic re-approval every 5 years
- 80G registration — must be renewed; donors' 50% deduction depends on your valid 80G
- Anonymous donations above ₹2,000 — taxable at 30% unless applied to religious purposes
Documents Required for ITR-7
Revised Return, Belated Return & ITR-U
Revised Return
Correct mistakes in an already-filed ITR — before the deadline
✅ When to File a Revised Return
- Forgot to declare interest income, dividend, or bonus
- Capital gains omitted or computed incorrectly
- Wrong tax regime selected (old vs new)
- Deduction under 80C / 80D / 80G missed or incorrectly computed
- AIS / Form 26AS mismatch discovered after filing
- TDS credit not reflecting — need to re-claim after correction
- House property income incorrectly reported
⚠️ Important Points
- Revised return must be filed before 31 December of the assessment year (or before completion of assessment, whichever is earlier)
- Belated return (filed after 31 July) can also be revised — but only before 31 December
- Original return must have been filed under Sec 139(1) or 139(4) to enable revision
- No revised return once the Assessing Officer has completed the assessment
- If additional tax is payable after revision — pay self-assessment tax + interest before revising
Belated Return
ITR filed after the original due date (31 July) but before 31 December of the assessment year
⚠️ Consequences of Late Filing
- Late fee under Sec 234F — ₹5,000 (income > ₹5L) or ₹1,000 (income ≤ ₹5L)
- Interest under Sec 234A @ 1% per month on unpaid tax from original due date
- Cannot carry forward capital losses — must file by original due date to carry forward
- Cannot carry forward business losses — lost if belated
- Loss of certain deductions — Sec 10A, 10B deductions not available for belated return
- Depreciation on business assets CAN still be claimed in belated return
✅ Still Worth Filing — Even After Deadline
- Avoid penalty under Sec 271F (₹5,000 to ₹10,000) for non-filing
- Claim TDS refund — if tax was deducted at source and refund is due
- Establish income proof — for visa, home loan, government tenders
- Avoid best judgment assessment by the department
- Can still claim deductions under Chapter VI-A (80C, 80D, etc.)
- Belated return can also be revised — before 31 December
Capital Gains Loss — File By 31 July or Lose the Carry Forward
This is the most financially significant consequence of a belated return that most taxpayers don't know. If you made a capital loss in FY 2024-25 (e.g., from mutual fund redemptions, stock sales at a loss), you must file your ITR by 31 July 2025 to carry that loss forward for offset against future capital gains. A belated return filed after 31 July forfeits this carry-forward — permanently. In a year with significant portfolio losses, the cost of late filing can be far greater than the ₹5,000 late fee.
Updated Return — ITR-U
File or correct income tax returns for any past assessment year — up to 2 years from the end of the AY
✅ When ITR-U Is Useful
- Missed filing original ITR and 31 December belated deadline has passed
- Filed ITR but omitted income — discovered after 31 December deadline
- Received an income tax notice and want to voluntarily disclose before assessment
- AIS / Form 26AS shows income not reported in original ITR
- Undisclosed foreign income that needs to be regularised
- Freelance income not reported in original return
🚫 ITR-U Cannot Be Used To
- Claim a refund or increase an existing refund
- Reduce income already declared in original / revised return
- Claim losses that were not claimed in original return
- File if a search / survey / scrutiny notice has been issued for that year
- File if prosecution proceedings are pending
- Reduce tax liability vs what was declared in original return
ITR-U — Voluntary Disclosure Before the Department Acts
ITR-U was introduced to give taxpayers a 2-year window to come clean on unreported income without facing prosecution. The additional tax of 25% or 50% on the incremental tax due is significant — but it is far less than the 200% penalty that applies if the department discovers undisclosed income first. If you've received a high-value transaction notice from the GST or Income Tax department, filing ITR-U immediately — before the department issues an assessment notice — is often the most cost-effective legal strategy. TaxClue advises on the right approach before ITR-U is filed.
| Assessment Year | ITR-U Window Closes | Additional Tax if Filed within 1st Year | Additional Tax if Filed in 2nd Year |
|---|---|---|---|
| AY 2023-24 (FY 2022-23) | 31 March 2026 | 25% of incremental tax + interest | 50% of incremental tax + interest |
| AY 2024-25 (FY 2023-24) | 31 March 2027 | 25% of incremental tax + interest | 50% of incremental tax + interest |
| AY 2025-26 (FY 2024-25) | 31 March 2028 | 25% of incremental tax + interest | 50% of incremental tax + interest |
Key ITR Filing Deadlines — AY 2025-26
ITR-1, ITR-2, ITR-3, ITR-4, ITR-5 where audit is not required. Missing this date means belated return and loss of capital / business loss carry forward.
All entities where tax audit under Sec 44AB applies, and companies (ITR-6). Also ITR-7 for trusts, NGOs, institutions.
Companies with Transfer Pricing documentation requirement (Form 3CEB). Extended deadline applies only if TP audit report is applicable.
Final opportunity to file belated return with ₹5,000 late fee. Also the last date to revise any ITR originally filed for AY 2025-26.
Frequently Asked Questions
If you have any capital gains (equity shares, mutual funds, property, crypto) in addition to salary, you must file ITR-2 — not ITR-1. Many people mistakenly file ITR-1 and leave out capital gains (thinking mutual fund redemptions don't need to be declared). This creates an AIS mismatch — the income tax department can see your redemption data from your broker. TaxClue handles ITR-2 filing with complete capital gains computation including grandfathering for equity held before January 2018.
The answer depends entirely on your specific numbers. The New Regime has lower slab rates but allows very few deductions (no 80C, 80D, HRA, home loan interest). The Old Regime has higher slab rates but allows all deductions. If your deductions are large (e.g., home loan interest of ₹2L + 80C of ₹1.5L + 80D of ₹50K = ₹4L of deductions), the old regime often results in lower tax. TaxClue computes the tax under both regimes for every client before filing — and selects the one that results in lower liability. The default is the New Regime if no explicit choice is made.
You have two options depending on the date: (1) Belated Return under Sec 139(4) — file before 31 December of the assessment year, with a late fee of ₹5,000 (or ₹1,000 if income ≤ ₹5L) and interest under Sec 234A on unpaid tax. Note that belated returns cannot carry forward capital losses or business losses. (2) Updated Return (ITR-U) — if even 31 December has passed, you can file ITR-U for up to 2 years from the end of the AY, but with an additional tax of 25–50% on the tax due. ITR-U is only for income declaration — it cannot be used to claim refunds.
First, verify whether the income in AIS is correct or an error. The AIS aggregates data from multiple sources — banks, mutual funds, registrars, brokers — and sometimes contains duplicate entries or incorrect data. If the income is correct and it was omitted from your original ITR, the options are: Revised Return (before 31 December), Belated Return (before 31 December if original wasn't filed), or ITR-U (if deadlines have passed). If the AIS data is incorrect, you can submit a feedback/correction through the income tax portal. TaxClue handles both — AIS reconciliation and the corrective filing — and advises on the most cost-effective route given your specific situation.
A private limited company files ITR-6. The due date is 31 October for regular audit cases, and 30 November if Transfer Pricing documentation applies. ITR-6 requires: statutory audit (under Companies Act), tax audit (under Sec 44AB — mandatory for all companies), and completion of advance tax payments. Even if the company has no income or is in a loss position, ITR-6 must be filed. TaxClue handles the full stack for companies: statutory audit coordination, tax audit (Form 3CA + 3CD), ITR-6 filing, and advance tax computation — as part of the annual compliance package.
Filing is mandatory if your gross total income before deductions exceeds the basic exemption limit (₹2.5L under old regime, ₹3L under new regime for individuals below 60 years). Even if no tax is payable — because all income falls within the slab or deductions eliminate liability — you must still file if income exceeds these limits. Additionally, filing is mandatory irrespective of income if you: own foreign assets, have deposited more than ₹1 crore in bank accounts, spent more than ₹2L on foreign travel, spent more than ₹1L on electricity, or are a company / firm / LLP. Filing even when not strictly required is advisable for income proof (visa applications, home loans, government contracts).
File Your ITR Right — The First Time
Salaried, business, capital gains, company, trust — or an ITR-U for a missed past year. TaxClue handles every form with a dedicated CA who knows your numbers.
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