Income Tax Registration (ITR)

ITR Registration in India

Government of India collects tax on income earned in this country based on certain criteria that is termed as Income Tax. This kind of tax comes under Direct Tax category with its rules and regulations described in Income Tax Act, 1961. Anyone who is liable to pay income tax should file Income Tax Return (IT Return) providing necessary income related details, such as, income, investment, deductions, contributions, etc. to submit in India’s Income Tax Department. As per Government Guidelines, earning people in India belonging to the given classifications, are considered to be taxpayers:

• Individual
• Hindu Undivided Family (HUF)
• Body of Individuals (BOI)
• Association of Persons (AOP)
• Local Authorities
• Corporate Firms
• Companies
• All Artificial Juridical Persons

When we’re talking about Income Tax liabilities applicable in India, we should let you know about the acceptable income sources where income tax is levied.

There are five income heads as defined to be recognized in Indian Law:

• Income from Salaries: Salaried income as mentioned in Section 192 of Income Tax Act.
• Income from Capital Gains: Income from selling capital assets, such as, buildings, lands, bonds, jewelries, etc.
• Income from House Property: Income through renting a house, space, etc.
• Income (Profits) from Business: A fixed part of business’s profit as mentioned in Section 30 and 43D of Income Tax Act.
• Income from other sources: Lottery, Dividend, Pension, Gifts, etc.

Note: Income Tax is calculated based on Rate Slabs that may change according to decisions taken by Finance Ministry and Tax Departments.

Types of ITR filing based on Income heads

Income Tax Return is allowed to be filed by any earning entity irrespective of whether the income comes under tax liability or not. For income taxpayers, timely IT Return Filing is mandatory, otherwise, can lead to penal charges. To separate the income sources, IT Department issues specific IT Return Forms:

• ITR Form 1: Income from regular salary/pension/income from property/others
• ITR Form 2: Income of any HUF member NOT from Income (Profits) from Business income head
• ITR Form 3: Income of any HUF member from Income (Profits) from Business income head
• ITR Form 4 (SUGAM): Income of any HUF/Individuals included in SUGAM taxation scheme as per section 44AD/AE/ADA
• ITR Form 5: Income of LLPs, BOIs, APIs, artificial judiciary persons, local authorities
• ITR Form 6: Those companies claiming no exemptions as per Section 11
• ITR Form 7: Income based on filing done as per Sections 139 (4A), 139 (4D), 139 (4C), 139 (4B)
• ITR Form V: To acknowledge the Return Filing (ITR Verification)

Documentation for ITR Filing in India

These information are essential at the time of making IT Returns:

• Permanent Account Number (PAN)
• Aadhaar
• Bank Account Details
• Form 16
• Investment Details