The Indian government imposes income tax laws for firms, individuals, LLPs, HUFs, local authorities, companies, etc. According to these laws, the concerned parties must pay tax on their taxable income. Resident and Non-Resident Indians with a taxable source of income in India must pay taxes if their annual income exceeds the exemption limit.
For those wondering who is eligible for the e-filing of income tax, here is some insight into ITR filing.
Who Should Register for ITR Filing?
Understanding who is eligible is crucial to ensure income tax law compliance in the country. Every Indian resident and NRI having an income source in India and earning more than the exemption limit must register for ITR filing. Those falling under any of the following categories are eligible for filing ITR in India:
· Individuals with Gross Income Exceeding the Exemption Limit: Any individual with a gross income exceeding Rs 2.5 Lakh in a financial year is eligible to file an ITR. However, this limit is Rs 3 Lakh for citizens between 60 and 79 and Rs 5 Lakh for citizens above 80. However, the gross income varies after considering deductions under sections 10 and 80C to 80U.
· Registered Businesses: All registered companies and entities earning money from business after GST certificate download are eligible to file ITR, regardless of whether they make a loss or profit during a financial year.
· Investors with Long-Term Capital Gains Above Rs 2.5 Lakh: Those who invest in equities, mutual funds, etc., for a period above the specified tenure generate income known as long-term capital gains. If their income from various assets is above Rs 2.5 Lakh, they are eligible to file an ITR and pay income tax.
Besides these, the following are also eligible for the e-filing of income tax:
· Signing Authorities: Indian nationals with signing authorities for foreign accounts are eligible to file income tax returns.
· Foreign Companies: Foreign companies benefitting from an Indian treaty must file an ITR.
· NRIs: Non-resident Indians must adhere to the taxation rules under the Income Tax Act and file an ITR to claim deductions under specific heads.
· Individuals Claiming Refunds: Individuals who wish to claim a refund after tax deduction must file an ITR to become eligible.
· Trust-Held Income: Entities or individuals earning income from an NGO, research organisation, or religious institution are eligible to file returns under the Indian tax laws.
· Loan Applicants: Many lending institutions require applicants to submit their latest ITR for qualification.
· Those with Business Interest in a Foreign Country: Indian citizens with asset or business interest in a foreign country are eligible to file ITR, except NRIs.
Eligibility for Different Types of Income Tax Returns
A taxpayer may be eligible for filing different types of income tax returns, including the following:
1. ITR-1: Indian individuals or pensioners with a gross annual income exceeding Rs 50 Lakh from salary, property, etc.
2. ITR-2: Individuals or HUFs with profit or income from sources other than their business or profession, such as foreign income, capital gains, or agricultural income.
3. ITR-3: Individuals, professionals, and business owners earning from business or professional sources.
4. ITR-4: HUFs, individuals, and partnership firms with income listed under presumptive income schemes, such as freelancers, doctors, insurance agents, retailers, etc. (ITR-3 for professionals with turnover exceeding Rs 2 Crore).
5. ITR-5: AOPs (Association of Persons), LLPs (Limited Liability Partnerships), BOI (Body of Individual), and partnership firms reporting income from any other business and source.
6. ITR-6: Companies that disclose their income from business or other income sources.
7. ITR-7: Companies, associations, and trusts claiming tax exemption.
Eligibility for Different ITR E-Filing Forms
Eligibility for Different Forms for the e-Filing of Income Tax
Here are the eligibility conditions for different ITR Filing Forms:
· Form 16: Salaried employees whose employers deduct TDS from their gross salary
· Form 26AS: Individuals with various income sources such as salary, property sale, etc.
· Form 15G and 15H: Individuals below 60 years with zero tax liability, earning income or interest without TDS deduction.
After understanding eligibility for the e-filing of income tax returns, remember that filing it on time makes the taxpayer a responsible citizen and saves them from unnecessary penalties and legal complications. Filing ITR also helps taxpayers claim the deducted amount, get loans, obtain startup funding, avail government scheme benefits, etc.
