Which ITR Forms should be used for 2020-21 (Assessment year 2021-22)

Which ITR Forms should be used for 2020-21 (Assessment Year 2021-22)?

Which ITR Forms should be used for 2020-21 (Assessment year 2021-22)Which ITR Forms should be used for Financial Year 2020-21 (A.Y.2021-22)?


Central Board of Direct Taxes (CBDT) has issued notification about new ITR forms – ITR 1 to ITR 7 for  the assessment year 2021-22 (Financial year 2020-21). While there is no significant changes made in revised ITR forms, there are bare minimum changes done due to ongoing COVID-19 crisis to facilitate the tax payers. Since the Income tax return (ITR) deadline is 31-Jul, one should be aware of the changes in the ITR forms. Which ITR Forms should be used for Financial Year 2020-2021 (Assessment year 2021-22)? Who need to file income tax Returns in FY2020-21?

Also Read: Between old vs new income tax regime, which is good for you?

What is Income Tax Return (ITR)?

If you are already aware, skip this section.

An ITR is the tax form that is used to file income tax with the income tax department. The return is filed in a predefined format where the income needs to be declared and calculate the tax liability. The Income Tax department has released the new ITRs for the financial year 2020-21 (Assessment Year 2021-22) with few major changes in the ITR forms. The last date of submission of income tax return is 31st July unless it is extended.

According to the income tax act, 1961 every income earned by an individual, HUF, firm, LLP, company or any other artificial person would fall into these 5 categories.

1) Income from salary

2) Income for household property

3) Income from business and profession

4) Income from capital gains

5) Income from other sources

The IT department has issued 7 different type of ITR Forms that contains the above 5 heads. Tax payer need to choose the right ITR form based on their income.

Who needs to file the income return?

As per the Income Tax Act 1961, if the person income exceeds the limit prescribed by the income tax department in a financial year, need to file the income tax return. The due dates are 31 July for salaried individuals and non-auditable firms. For companies and auditable firms, it is 30 September.

ITR Forms for financial year 2020-21 (Assessment Year 2021-22)

1) CBDT indicated that there is dedicated space for tax payers to describe their investments in Form Sahaj ITR-1, Form ITR-2, Form ITR-3, Sugam Form ITR-4, Form ITR-5, Form ITR-6, Form ITR-7 and Form ITR-V.

2) If you have earned income during 1st April, 2020 to 31st March, 2021, this would fall under assessment year 2021-2022 and you need to use these new ITR forms for this period.

3) Sahaj ITR Form-1 and Sugam ITR Form-4 are simple ITR forms which cater to majority of small and medium tax payers.

4) Sahaj ITR Form-1 is the simple form to be filled by individudals who have income up to Rs 50 Lakhs and who receive income from salary, income from house property and income from other sources like interest etc.

5) Sugam ITR Form-4 can be used by individuals, HUFs and partnership firms that have total income up to Rs 50 lakhs and income from business and profession which is computed under presumptive taxation provisions.

6) Individuals + HUFs, who do not have income from business and profession and not eligible for Sahaj, can file ITR-2. Who have income from business and profession can file ITR-3.

7) Tax payers other than individuals, HUFs and companies can file ITR form-5. These tax payers include partnership firms etc.

8) Companies need to file ITR-6.

9) Trusts, Charitable institutions, Political parties who want to claim exempt income can file ITR-7.

Which ITR Form should you use for 2020-21 (assessment year 2021-22)?

You might be wondering which ITR form is applicable to you. This would depend on the source of income and few other parameters. Let me provide details about ITR-1 and ITR-4.

1) Who can file Sahaj ITR -1 for 2020-21?

Salary or pension income

Income / Loss from one house property

Agricultural income less than Rs 5,000

Income from other sources like FD interest, interest on small saving schemes, Post Office interest etc.,

Resident Indians, who are not ordinarily resident with income up to Rs 50 Lakhs.

Who cannot file Sahaj ITR-1?

If you are the director in the company.

Invested in unlisted shares of the company.

Bought forward or carry forward losses from income from house property.

Furnish return under 7th provision to section 139 (1) of the income tax act.

2) Who can file Sugam ITR–4?

Individual, HUFs and Firms whose income is less than Rs 50 Lakhs and having income from business or profession and income from house property (individual ownership).

Agricultural income less than Rs 5,000.

Who cannot file Sugam ITR-4?

If you are the director in the company.

Invested in unlisted shares of the company.

Bought forward or carry forward losses from income from house property.

You may like: List of 80c tax saving investments and deductions

What happens in case wrong ITR form is filled while filing ITR?

The income tax assessee has to choose right IT forms which are applicable to them according to source of incomes. If a wrong IT return has been filed by the assessee, then it is treated as defective and return will be deemed as not been filed. In such case, rectification has to be made under Section 139 (5). It has to be done within the 15 days (or prescribed) of receiving the Income Tax notice. Hence it is recommeneded to fill right ITR forms with accurate information to avoid getting any notices from income tax department.

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Suresh KP

8 thoughts on “Which ITR Forms should be used for 2020-21 (Assessment Year 2021-22)?”

  1. I am a NRI. Last financial year I redeemed the MFs but the LTCG was below 1 lakh. Since I am a NRI, TDS was deducted before redemption.
    In this case, What ITR form to be filled in to get back the TDS ?

    Thanks in advance

  2. Hello Sir,

    Informative and useful article.

    I have some doubts.

    For senior citizen, whose income is less than 2L.
    Income => from LIC pension plan (annuity) + Bank FD + Debt mutual Fund + dividend from stocks (total less than 1.5L)
    L/T Capital gain => Non taxable gain (less than 1L) from equity mutual fund/direct stocks.

    In above scenario,

    1. Is it mandatory to file income tax return ? ( as total income is less than 3L and L/T capital gain from equity is also within limit of 1L – tax free )

    2. If one wants to file ITR in this scenario even though not mandatory, which ITR form should be submitted ? ITR1 or ITR2 ?

    Looking forward to your response.

    Thanks sir.

    1. 1) Since you want to claim 1L tax free limit, it is advisable to file income tax and show this 1L as exempt income to avoid any future scrutiny. 2) If you have pension income + capital gains, then ITR2 should be filled.

  3. Which form to use for income from STCG and LTCG of the shares of listed companies. And also for dividend income.

  4. Im a European passport holder with OCI staying in India for now, I had a NRO account where i earned interest which was under 8000rs a year where TDS was cut by bank. I got a text message from CMCPCI saying my PAN has been flagged for not filling of ITR for AY2020-21. I spoke to the bank manager and he said i don’t need to file an ITR and only do it if i want the TDS return. The TDS was under 2000rs so i didn’t bother but i got another text message saying the same. So i went and closed the NRO account. Now so far i didn’t get any text or call.
    What should I do?

    1. Hello M Cruz, I suspect that these SMS are coming since you paid income tax and filed tax returns earlier. You have two options 1) If you do not have taxable income, you need not file income tax return and ignore such SMS. 2) If you have plan to come back and settle in India in near future, you can file tax returns with whatever TDS that got deducted and then claim them as tax refunds.

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