Filing Income Tax Returns (ITR) in India is a mandatory obligation for individuals and entities whose income crosses the basic exemption limit. However, choosing the right ITR form can be confusing due to the variety of categories, income types, and sources involved. Whether you're a salaried employee, business owner, freelancer, or investor, selecting the correct ITR form is essential to ensure your return is valid and processed without delay.
This guide will help you understand which ITR form to fill for FY 2024-25 (AY 2025-26) based on your income, sources, and profession.
What is an ITR Form?
An Income Tax Return (ITR) Form is a document through which taxpayers furnish their income details, deductions, tax liabilities, and taxes paid to the Income Tax Department of India. The ITR form to be filled depends on the nature and volume of income, category of taxpayer, and source of income.
There are currently seven ITR forms—ITR-1 to ITR-7.
Why is Selecting the Right ITR Form Important?
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Incorrect form may lead to the return being treated as defective.
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Ineligible deductions or exemptions could be denied.
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Delayed processing or notices from the IT Department may occur.
Hence, it's crucial to know which ITR form applies to you.
List of ITR Forms and Who Should File
Let’s break down each ITR form in simple terms to help you identify which one suits your income profile.
ITR-1 (Sahaj)
Applicable For:
Resident individuals (not HUF)
Income up to ₹50 lakh
Income from salary, pension, one house property, and other sources (excluding lottery, horse racing)
Not Applicable For:
Non-residents
Income from more than one house property or capital gains
Holding unlisted equity shares
Foreign assets or income
Ideal For: Salaried individuals with a simple income structure.
ITR-2
Applicable For:
Individuals and HUFs not having income from business or profession
Income includes salary, more than one house property, capital gains, foreign assets/income
Not Applicable For:
Individuals with income from a business or profession
Ideal For: High-salaried professionals, capital market investors, NRIs with Indian income
ITR-3
Applicable For:
Individuals and HUFs with income from business or profession
Includes income from partnership, speculative business, commissions, and freelancing
Ideal For: Business owners, freelancers, doctors, consultants
ITR-4 (Sugam)
Applicable For:
Individuals, HUFs, and Firms (excluding LLPs)
Presumptive income under Section 44AD, 44ADA, 44AE
Total income up to ₹50 lakh
Not Applicable For:
If you have foreign income, multiple house properties, and capital gains
Ideal For: Small business owners, shopkeepers, contractors, freelancers opting for presumptive taxation
ITR-5
Applicable For:
Partnership Firms, LLPs, AOPs, BOIs
Not applicable to individuals, HUFs
Ideal For: LLPs and partnerships involved in trade, services
ITR-6
Applicable For:
Companies not claiming exemption under Section 11 (income from property held for charitable purposes)
Ideal For: Private limited companies, registered businesses
ITR-7
Applicable For:
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Trusts, political parties, institutions claiming exemptions under sections 139(4A) to 139(4D)
Ideal For: NGOs, religious institutions, universities
ITR Form Selection Guide Table
ITR Form for Salaried Person
Up to ₹50 lakh: ITR-1
More than ₹50 lakh or capital gains/foreign income: ITR-2
ITR Form for Businessman or Freelancer
Presumptive Income (44AD/ADA): ITR-4
Regular Income with books of accounts: ITR-3
ITR Form for NRI (Non-Resident Indian)
With salary, rent, capital gains: ITR-2
With business income: ITR-3
NRIs cannot file ITR-1 or ITR-4.
ITR Form for Rental Income
One house property: ITR-1 (if income < ₹50 lakh)
More than one property or foreign property: ITR-2
ITR Form for Stock Market Investors
Capital Gains from shares/mutual funds: ITR-2
Intraday trading or F&O: ITR-3 (considered as business income)
Which ITR Form for Crypto Income?
As crypto is considered speculative business income:
Use ITR-3
If shown as capital gains, ITR-2 can be used
How to Choose the Right ITR Form?
Ask yourself:
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Are you salaried or self-employed?
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