Income Tax Eligibility Calculator

What is an ITR?

ITR that stands for Income Tax Return is a form that an assessee is supposed to submit to the Income Tax Department of India. This form holds all the information about the taxpayer's annual income and the total amount of tax to be paid and refund to be credited for that particular year. There exist seven different forms of ITRs and these are taken into consideration only when the individuals are filing returns as per the Central Board of Direct Taxes (CBDT) of India. following are the types of ITR Forms

• ITR-1: Another name for this form is Sahaj and it should be filed solely by resident individual ( other than not ordinarily residents) taxpayers under a few conditions.
  1. When an individual receives the income in the form of salary or pension.
  2. When an individual earn income from single house property.
  3. When an individual is not earning any income from other countries and having no property in other countries.
  4. When the individual has no income from businesses or capital gains.
  5. If the income obtained through agriculture is below rupees 5000.
  6. If the source of income (except winning from lottery, income from horse races) for the individual is from multiple sources like investments, fixed deposits, and schemes.
  7. When an individual’s total income does not exceed Rs. 50 lakhs.
  8. If an individual plans to acquire their spouse's or underage child's income as their own after fulfilling some specified criteria.
• ITR-2: The newly introduced form can be used by a Hindu Undivided Family (HUF) or an individual taxpayer. It applies to the following people:
  1. Applicability for ITR-2 is almost the same as it is for ITR-1. Although, there are some differences such as: when the income received through agriculture is above rupees 5000, when income is received through capital gain and when the individual obtains income through activities such as lotteries, betting et cetera.
• ITR-3: This form applies to both HUF and an individual of who have their income comes from profits from business or a profession. It is applicable when the income for the individual is through interest, remuneration, commission, or bonus.
• ITR-4: This form applies to individual ,HUFs and partnership firms( Other than LLP) when the income is computed on presumptive basis under the following sections
  1. Business earnings as per the provisions of Section 44AD and 44AE.
  2. Professional Income under the special provisions of Section 44ADA.
• ITR-5: This form is used only by a handful of firms that can claim tax exemption as per Section 11 of the Income Tax Act. They are Limited Liability Partnerships (LLP's), co-operative societies, artificial judiciaries, Body of Individuals (BOIs), Association of Persons (AOPs), Estate of insolvent, Business trusts , investment fund and local authorities.
• ITR-6: This form is applicable for any company except to firms or organizations that claim tax exemption as per Section 11 of the Income Tax Act. Organizations that claim the tax exemption u/s 11 are those which received income from property and used it for religious and charitable purpose.
• ITR-6: ITR-7: It applies when the income obtained is concerning a few Sections
  1. Section 139(4A - People earning through religious funds or charitable trust.
  2. Section 139(4B) - Political parties whose income surpasses non-taxable limits.
  3. Section 139(4C)- Any institution under Section 10(23A) and institutions like new agencies, medical institutions, research associations, or educational entities that come under Section 10(23B).
  4. Section 139(4D) - Universities or colleges whose earnings or losses are not under the provision of this Section.
  5. Section 139(4E) - Business firms that are not required to provide a return of income or loss as per other provisions of this Section.
  6. Section 139(4F) - As per Section 115UB, investment funds are supposed to file returns under this Section.

How to use the eligibility checker in File My Tax online?

• Step 1- Go to the ‘Income Tax Eligibility Checker’ page and click on ‘Check Your Eligibility for ITR’.
• Step 2- A page titled ‘Income Details’ requesting your date of birth and annual income appears. Enter the details correctly and click on ‘Next.
• Step 3- A page titled ‘Other Details’ appears. Answer all the questions asked by either choosing ‘yes’ or ‘no’.
• Step 4- A final page requesting personal details like full name, email ID, and mobile number are displayed. Provide all the details and click on ‘Next’.( you can also skip this step)
• Step 5- The File My Tax online eligibility checker displays if ITR filing is mandatory for you or not. If you need to file ITR, then click on the ‘File ITR Now’ option given below.

Prerequisites for e-Filing
The important documents that are required for filing income tax returns are-

1. Permanent account number
2. Aadhar card
3. Bank Account details
4. Form 16
5. Form 26AS
6. Investment details

Who should file ITRs?

According to the provisions of the Income Tax law, an individual whose annual income exceeds the limit of Rs. 2,50,000/ 300000/500000 is mandated to file tax returns as a way of informing the government to run the financial sectors of the country smoothly.

There are exceptions where an individual's income does not meet the taxable limit but is still mandated to file tax returns. The conditions for the same include:

• If the deposited amount in one or more current accounts crosses the threshold of Rs. 1 crore.
• If the traveling expenditure for moving into another country exceeds the limit of Rs. 2 lakh.
• If the total bill amount towards the consumption of electricity exceeds Rs. 1 lakh.
• Any individual with an annual income below the taxable limit but possesses a bank account, a beneficiary interest in an entity outside India, holds a capital asset, or has a signing authority in any account.

What are the benefits of filing ITRs?

The key benefits of filing your Income Tax Return regularly are as follows:

• To claim tax refund- Instances where the total taxable income is less than the threshold of exemption limit. Especially individuals earning an income through deposit interests or through dividends that normally undergo tax withholding.
• Hassle-free and quick Visa processing- Timely filed ITR documents for the last two years are made mandatory to produce at the embassies or consulates.
• To avoid penalties- If you fail to file your ITRs periodically and systematically, the tax office has the right to charge you with a fine of rupees 5,000 as per the Income Tax Act, 1961.
  1. For carry forward of losses
  2. To take insurance policies with high cover.