A Clear, Category-wise Guide for FY 2024-25 (AY 2025-26)
Filing one’s ITR isn't just a legal formality—it’s an essential financial hygiene practice. For employees, business owners, traders, landlords, retirees, and NRIs alike, it ensures compliance, helps in availing refunds, loan applications, and future tax planning. The new and old regimes give flexibility in how tax is calculated, but the process is essentially similar for all. Here is an authoritative roadmap, tailored for every type of taxpayer.
1. Salaried Individuals / Job Holders
Appropriate Forms:
🔸ITR-1 (Sahaj): If total income ≤ ₹50 lakh, from salary/pension, one house property, and other sources (interest).
🔸ITR-2: If there are capital gains, more than one house property, or foreign income.
Documents Needed:
🔸Form 16 (from employer),
🔸Form 26AS (tax statements),
🔸AIS/TIS statements (taxpayer info),
🔸Salary slips,
🔸Interest certificates,
🔸Proofs for deductions (80C, 80D, etc.).
Stepwise Filing:
🔸Collect Form 16 and match data with Form 26AS/AIS for TDS and reported incomes.
🔸Add income from salary, allowances, and perquisites.
🔸Add house property income (if any; rent or self-occupied).
🔸Add “other sources” (interest, FD, savings bank, etc.).
🔸Select regime:
🔹Old regime for full deductions (80C, HRA, home loan),
🔹New regime (default) for lower tax but fewer deductions.
🔸Review computation, pay balance tax if owed.
🔸Submit and e-verify with Aadhaar OTP/net banking.
Forms:
🔸ITR-3: For regular business/profession income, F&O trading, intraday trading.
🔸ITR-4 (Sugam): If opting for presumptive taxation under 44AD/44ADA/44AE, only for small businesses and professionals (not for capital gains income).
Documents Needed:
🔸Books of accounts,
🔸Profit & Loss Statement,
🔸Balance sheet,
🔸Turnover report (especially for traders),
🔸Expense proofs,
🔸Audit report if turnover exceeds prescribed limit,
🔸Broker’s P&L statement.
Process:
🔸Compute turnover (esp. for trading; get P&L from broker).
🔸Split income: speculative (intraday), non-speculative (F&O), capital gains, and investments.
🔸Deduct expenses: brokerage, internet, depreciation, etc.
🔸Opt for old regime with Form 10-IEA (must be filed before due date); otherwise, new regime is default.
🔸Fill in revenues, expenses, depreciation, and net profit.
🔸Add all other incomes (salary, rent, capital gains, etc.).
Forms:
🔸ITR-2: Only capital gains, no business income.
🔸ITR-3: Capital gains plus business/profession.
Documents:
🔸Broker contract notes,
🔸Form 26AS, AIS,
🔸Sale/purchase deeds (stocks, property, crypto),
🔸Cost of acquisition records.
Steps:
🔸Identify and classify capital gains as short-term or long-term, by asset type (equity, non-equity).
🔸Apply indexation (for certain long-term gains; e.g., property, debt funds).
🔸Note exemptions (e.g., LTCG on equity up to ₹1 lakh/year).
🔸Fill capital gains detail (ISIN-wise for securities).
🔸Add other incomes if any.
🔸Choose regime (old/new - note that deductions rarely apply to capital gains).
🔸Submit and verify.
Forms:
🔸ITR-1: For one house property, no business/capital gains.
🔸ITR-2/3: For multiple houses or in combination with other incomes.
Documents:
🔸Rent agreements,
🔸Municipal tax receipts,
🔸Home loan statements (for interest deduction).
Process:
🔸Declare rental income or notional rent (if applicable).
🔸Claim allowable deductions:
🔹30% standard deduction,
🔹Municipal taxes,
Forms:
🔸ITR-1: Pension income treated akin to salary, with one house property, and interest.
🔸ITR-2: For capital gains, multiple properties.
Documents:
🔸Pension certificate/form,
🔸Bank interest certificate,
🔸Form 16 (if pension from bank).
Process:
🔸Enter pension under salary head.
🔸Add interest from FDs and savings.
🔸Claim all senior citizen deductions:
🔹Section 80C (investments),
🔹Section 80D (insurance—higher limits for seniors),
🔹Section 80TTB (interest deduction up to ₹50,000).
🔸Compute tax under both regimes and pick whichever is beneficial.
🔸Submit and e-verify.
Forms:
🔸ITR-2: Indian investments, rent, capital gains.
🔸ITR-3: If business/profession income from India.
Documents:
🔸NRE/NRO account statements,
🔸TDS certificates,
🔸Property documents,
🔸Capital gains schedules.
Steps:
🔸Report all income sourced from India: rent, dividends, capital gains, etc.
🔸Disclose foreign assets only if resident in India; not mandatory for non-residents.
🔸Claim DTAA (Double Tax Avoidance Agreement) benefits if applicable.
🔸Carefully select regime (NRIs generally not eligible for certain rebates/exemptions in new regime).
🔸File and complete e-verification.
Filing your ITR correctly doesn’t need to be stressful—if you approach it step-by-step and know your category, it becomes almost routine. With this comprehensive guide, anyone—salaried, self-employed, trader, investor, retiree, landlord, or NRI—can confidently meet their tax obligations and maximize compliance. If there’s confusion at any step, always refer to the official Income Tax portal or consult a tax expert. Timely and accurate filing helps avoid penalties, ensures speedy refunds, and keeps your financial record in top shape.
