TaxFinancial Glossary
ITR (Income Tax Return)
Definition
The form filed by taxpayers to report their income, claim deductions, and determine tax liability for a financial year. India has seven ITR forms: ITR-1 (Sahaj) for simple salaried individuals, ITR-2 for individuals with capital gains, ITR-3 for business income, and so on up to ITR-7.
Why It Matters
Filing ITR is mandatory if your gross income exceeds the basic exemption limit, even if your final tax liability is zero. Beyond compliance, ITR acknowledgements serve as proof of income for visa applications, loan approvals, and insurance claims. Filing on time also preserves your right to carry forward capital losses.