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News18
22-05-2025
- Business
- News18
ITR Filing FY2024-25: 7 Types Of Taxpayers In India; Know Which ITR Form Applies To You
Last Updated: ITR Filing FY2024-25: It's quintessential to choose the correct ITR form based on one's income sources and entity type to ensure compliance and avoid penalties. ITR Filing FY2024-25: The new Income Tax filing season kicks in on April 1, 2025. To avoid any violation and penalty, taxpayers must file their income tax return (ITR) before the deadline, which is July 31. The Income Tax Department has notified all forms from ITR-1 to ITR-7 for the financial year 2024-25 (AY 2025-26). There are seven types of taxpayers under the income tax rules in India, from individual to company. Understanding your category will help you to choose the right ITR form for you based on income sources and entity types, which eventually decreases the risk of being rejected due to an anomaly or discrepancy. Let's understand the seven types of taxpayers in the country and which one is appropriate for you. 1. Individual Who: Single taxpayers, including salaried employees, freelancers, and professionals. Taxation: Based on income slabs; different rates for general, senior (60–80 years), and super senior citizens (80+ years). ITR Forms: ITR-1 (Sahaj): For salaried individuals with income up to ₹50 lakh. ITR-2: For those with capital gains or multiple properties. ITR-3: For income from business/profession. ITR-4 (Sugam): For presumptive income under Sections 44AD, 44ADA, or 44AE. 2. Hindu Undivided Family (HUF) Who: A family unit with common ancestors, treated as a separate entity. Taxation: Similar to individuals, with applicable deductions and exemptions. ITR Forms: ITR-2, ITR-3, or ITR-4, depending on income sources. 3. Company Who: Private or public limited companies registered under the Companies Act. Taxation: Flat corporate tax rates; special provisions like Minimum Alternate Tax (MAT) may apply. ITR Form: ITR-6 (except for companies claiming exemption under Section 11). Taxation: Taxed either at individual rates or maximum marginal rate, based on specific conditions. ITR Form: ITR-5. Who: Municipalities, Panchayats, and other local governing bodies. Taxation: Income from commercial activities is taxable; certain incomes may be exempt. ITR Form: ITR-5 7. Artificial Juridical Person (AJP) Who: Entities not covered above, like trusts, societies, and other legal entities. Taxation: Varies based on the nature of the entity and its income. ITR Forms: ITR-5: For general AJPs. ITR-7: For entities claiming exemptions under Sections 11, 12, etc., like charitable trusts. It's quintessential to choose the correct ITR form based on one's income sources and entity type to ensure compliance and avoid penalties. First Published: May 21, 2025, 06:26 IST
India Today
08-05-2025
- Business
- India Today
ITR Filing 2025: What is ITR Form 3, check eligibility, documents and deadlines
The Income Tax Department has rolled out the ITR-3 form for the financial year 2024-25 (assessment year 2025–26) and is used for reporting income earned between April 1, 2024 and March 31, you're an individual or part of a Hindu Undivided Family (HUF) running a business or working as a professional, say a doctor, lawyer, CA, or even a freelancer, this is the form you'll likely use to file your income tax form covers those who earn from business or professional work and need to maintain proper books of accounts. You can also use it if you've got income from salary, house rent, capital gains, or other sources along with your business CAN FILE ITR-3?You should file ITR-3 if you run a business or work as a self-employed professional, regardless of whether a tax audit is needed. It also applies if you're earning a salary, rental income, capital gains, or any income from other sources along with your business or professional income. Even if you receive income as a partner in a firm, such as your share of profits or remuneration, this is the right form for CANNOT FILE ITR-3?You can't use the ITR-3 form if you're not an individual or a member of a Hindu Undivided also not for those who don't have income from a business, profession, or partnership firm. If your earnings come only from salary, rent, or interest, this isn't the right form for DOCUMENTS DO YOU NEED?advertisementTo file your ITR-3 smoothly, keep your PAN and Aadhaar cards ready, along with your bank account you're salaried, you'll also need Form 16. For those who've made investments, having proof of those investments is important if you're running a business or working professionally, make sure your books of accounts are up-to-date and THE LAST DATE TO FILE ITR-3?When it comes to ITR-3, the deadline varies. If you don't need an audit, the last date to file is July 31, 2025. If your accounts require auditing, you get time until October 31, case you've had international dealings, your deadline goes further to November 30, 2025. And if you still miss it, you can file a late return by December 31, Reel
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Business Standard
05-05-2025
- Business
- Business Standard
ITR-3 updated: What biz owners, professionals must know for FY25 tax filing
If you're an individual or part of a Hindu Undivided Family (HUF) earning income from a business or profession, it's time to get familiar with the newly notified ITR-3 form for Assessment Year 2025–26. The Income Tax Department has made key changes to the form, aiming to simplify tax filing and reduce unnecessary disclosures—especially for middle-income taxpayers. Here's what you need to know if you fall in this category. What's New in ITR Form 3 (AY 2025–26)? Who should file it? ITR-3 is meant for individuals and Hindu Undivided Families (HUFs) who earn income from business or profession. Those not eligible to file simpler forms like ITR-1 or ITR-4 If you're a freelancer, doctor, lawyer, consultant, or have any kind of business income, this form is for you. Key Changes and Highlights: Increased Threshold for Asset & Liability Disclosure: Earlier, you had to report assets and liabilities if your total income exceeded Rs 50 lakh. Now, the threshold has been increased to Rs 1 crore, reducing the disclosure burden for many middle-income taxpayers. What this means for you? Relief for Middle-Income Taxpayers: You no longer need to report your assets and liabilities in Schedule AL unless your total income exceeds Rs 1 crore (previously ₹50 lakh).This significantly reduces paperwork for professionals and business owners in the middle-income bracket. Split Reporting of Capital Gains: If you sold real estate or any other long-term capital asset, you now need to separately report gains made before and after July 23, 2024. This change reflects the Budget 2024 update, which introduced: A 12.5% LTCG tax without indexation (for sales after July 23) OR, the traditional 20% LTCG tax with indexation Taxpayers who purchased real estate before July 23, 2024, can choose the option that benefits them the most. This gives more flexibility to taxpayers based on when they bought/sold the property. Ease of Deductions: Dropdown menus for deductions like Section 80C, 80GG, and others have been added. This makes it easier and more transparent when claiming deductions. Section-Wise TDS Reporting: Taxpayers now have to report Tax Deducted at Source (TDS) in more detail, section by section, improving clarity for both the filer and the tax department. Why these changes matter: According to Sandeep Sehgal, Partner – Tax at AKM Global: 'These updates simplify compliance for business owners and professionals. Dropdowns for deductions and section-wise TDS reporting enhance transparency and accuracy.' The changes are also aligned with efforts to make tax filing more user-friendly, and better synced with emerging tax policies like the new LTCG structure. Budget 2024 Impact: What you should keep in mind Selling real estate? You now have a choice: pay lower tax (12.5%) without indexation, or claim inflation-adjusted costs and pay 20%. Gains before July 23, 2024, still fall under the old regime. Make sure to keep sale documents, cost details, and timelines handy for accurate reporting. For professionals, freelancers, and small business owners, the new ITR-3 form brings: Less disclosure if your income is below Rs 1 crore More clarity and control over capital gains tax Streamlined deduction claims But it also comes with new reporting responsibilities, especially for capital gains and TDS. As the filing window for FY 2024–25 (AY 2025–26) opens, it's wise to get organized early. Keep your income records, expense proofs, investment documents, and capital asset sale details ready—and consult a tax advisor if you're unsure which LTCG option suits you best. With inputs from PTI
Hindustan Times
04-05-2025
- Business
- Hindustan Times
Supreme Court reaffirms that property shares become self-acquired after a joint family split, granting the right to sell
The Supreme Court has reaffirmed that after the partition of joint family property, the shares allotted to each member become their self-acquired property. The individual holding such property has the right to sell, transfer, or bequeath it as desired. What this order means is that a property acquired by a member of a joint Hindu family after the severance of status is considered self-acquired property that means that the individual now has full control and ownership over that property. If a family member chooses to sell their individual share, they have the legal right to do so as they would with any self-acquired property. In practical terms, if the property has been partitioned and the individual share is clearly defined and separated, the person can sell, transfer, or otherwise dispose of that share without needing approval from other family members, since it's now their self-acquired property. This also means they can decide how to handle the property—whether to sell it, gift it, or pass it on through a will—according to their own wishes. However, if the family hasn't formally partitioned the property, selling an individual share may still require agreement from other coparceners, depending on the legal status of the property and local laws regarding partition, said legal experts. 'After the joint family property has been distributed in accordance with law, it ceases to be joint family properties and the shares of the respective parties become their self acquired properties,' the court said in its recent order. A bench of Justice JB Pardiwala and Justice R Mahadevan held recently that after a partition, each party receives a separate and distinct share which becomes their self-acquired property with absolute rights to sell, transfer, or bequeath. The Supreme Court held this in the case of Angadi Chandranna v. Shankar & Ors. (2025). A Joint Hindu Family (JHF) is a family unit where the property is owned collectively by all its members, typically governed under the Hindu Undivided Family (HUF) system. In this system, male descendants acquire a birthright in the family property, with up to three generations inheriting this right. Under traditional Hindu law, no coparcener (a member with a birthright) can claim a specific portion of the joint family property until a formal partition takes place, as each member holds an undivided interest in the entire property. Following the 2005 amendment to the Hindu Succession Act, daughters now have the same birthright as sons in joint family property, ensuring equal inheritance rights. In contrast, self-acquired property refers to property that an individual acquires through their own efforts, without utilizing any joint family resources or ancestral assets. This type of property may be obtained through personal income, individual enterprise, or personal skill, without relying on the family's ancestral wealth. The owner of self-acquired property has complete control over it, including the right to sell, mortgage, gift, or bequeath it, without needing the consent of other family members. A joint Hindu family property is the property in which each member of the joint Hindu family has an inherent title and share irrespective of who acquires it. Partition of joint Hindu family confers severance of status of jointness and the united identity of the family is dissolved. 'Upon such partition the jointly held ownership of the properties belonging to the joint Hindu family transforms into separate ownership. After partition each member/coparcener gets the separate and distinct share which becomes his/her self-acquired property,' explains Sunil Tyagi, Managing Partner, ZEUS Law Associates. This recent judgment of the Supreme Court in the matter of 'Angadi Chandranna v. Shankar & Ors.' once again affirms the settled position regarding property rights of the coparcener after partition of the joint Hindu family. This judgment reiterates that any property acquired by a member of joint Hindu family post severance of status of joint Hindu family is his self-acquired property. A person who acquires such property has a right to sell, transfer or bequeath such self-acquired property in the manner he deems fit, he said. This decision of the Supreme Court clarifies that a clear intention to waive separate rights must be established if such self-acquired property is to be considered once again as the joint Hindu family property, he said. He also points out that a voluntary action by the owner of the property to include such self-acquired property into joint Hindu family hot potch, with intention of abandoning his separate rights therein must be established for it to qualify again as a joint Hindu family property.
