Question 1

Which ITR form should a salaried employee file?

Accepted Answer

ITR-1 (Sahaj) if you are a resident individual with total income up to ₹50L from salary or pension, income from up to two house properties, and interest income. For AY 2026-27 the house property limit was raised from one to two. You move to ITR-2 once your income crosses ₹50L, you have any short-term capital gain, long-term equity gains above ₹1.25L, or any gain from property, gold or debt funds.

Question 2

Which ITR form should a freelancer file?

Accepted Answer

ITR-4 (Sugam) if you declare presumptive income and your total income stays within ₹50L. Section 44ADA covers professions at 50% of gross receipts up to ₹50L, extending to ₹75L only where cash receipts are 5% or less of gross receipts. Section 44AD covers business at 8% (6% for digital receipts) up to ₹2 crore, extending to ₹3 crore on the same 5% cash test. A cheque or draft that is not account-payee counts as cash. If you maintain actual books, or your total income exceeds ₹50L, use ITR-3.

Question 3

Which ITR form is for capital gains?

Accepted Answer

It depends on the gain. From AY 2026-27 an aggregate long-term equity gain within ₹1.25L can be reported in ITR-1 or ITR-4. Beyond that you need ITR-2, or ITR-3 if you also have business income, because Schedule CG only exists in those two forms. Any short-term capital gain — however small — rules out ITR-1 and ITR-4.

Question 4

What rules me out of ITR-1 and ITR-4 even if my income is simple?

Accepted Answer

Seven situations, any one of which is enough: you transferred crypto or another virtual digital asset, you were a director in a company, you held unlisted equity shares or unlisted ESOPs, you have losses to carry forward or brought-forward losses to set off, you have foreign income, foreign assets or signing authority abroad, you are a non-resident or not ordinarily resident, or you own more than two house properties. Crypto is the one people miss most often — Schedule VDA exists only in ITR-2 and ITR-3.

Question 5

What is the difference between ITR-3 and ITR-4?

Accepted Answer

ITR-4 is the simplified form for presumptive taxation under Sections 44AD, 44ADA and 44AE, and it carries its own ₹50L total-income ceiling. ITR-3 is for all other business and professional income, where you compute actual profit from books. A presumptive filer also has to move to ITR-3 if any of the disqualifying situations apply, or if a short-term capital gain arises.

Question 6

Can I file ITR-1 if I have LTCG from mutual funds?

Accepted Answer

Yes, from AY 2026-27 (FY 2025-26) ITR-1 accepts long-term gains from listed equity shares and equity-oriented mutual funds, provided the aggregate does not exceed ₹1.25 lakh. The ₹1.25L is a single limit across all such holdings, not one per fund. Above that you need ITR-2. Report the gain either way — exempt is not the same as undisclosed.

Question 7

When is the ITR due date for AY 2026-27?

Accepted Answer

The Finance Act 2026 amended Section 139(1) to split the non-audit due dates: 31 July 2026 for ITR-1 and ITR-2, and 31 August 2026 for ITR-3 and ITR-4 filers who are not liable to tax audit. If your accounts are subject to tax audit, a later due date applies. Filing by the due date also matters if you want to carry a loss forward.

Question 8

What happens if I file the wrong ITR form?

Accepted Answer

Filing the wrong ITR form can result in a defective return notice from the Income Tax Department. You will need to file a revised return using the correct form. Always verify your income sources before selecting the form.

Form	Who Should File	Key Conditions
ITR-1 (Sahaj)	Salaried individuals, pensioners	Resident individual, total income up to ₹50L, salary or pension + up to two house properties + interest. Aggregate LTCG within ₹1.25L from listed equity/MF now allowed. Ruled out by any STCG, crypto, directorship, unlisted shares, carry-forward losses, foreign assets or non-resident status.
ITR-2	Individuals with capital gains, multiple properties, foreign income	No business or professional income. Any short-term gain, LTCG above ₹1.25L, or gains from property, gold or debt funds. Income above ₹50L. More than two house properties. Foreign assets or income. Crypto transfers (Schedule VDA).
ITR-3	Business owners, professionals (non-presumptive)	Business or professional income computed from actual books. Also the fallback for a presumptive filer whose total income exceeds ₹50L, who has any STCG, or who hits a disqualifying condition. Carries every schedule including CG and VDA.
ITR-4 (Sugam)	Freelancers, small business owners (presumptive)	Total income up to ₹50L. Section 44ADA: 50% of gross receipts, limit ₹50L — ₹75L only if cash receipts are ≤5%. Section 44AD: 8% (6% digital), limit ₹2Cr — ₹3Cr on the same cash test. Section 44AE: goods carriage owners. On house properties, the department's ITR-4 help still refers to one — confirm before filing with two.
ITR-5	Firms, LLPs, AOPs, BOIs	Not for individuals or HUFs. For partnership firms, LLPs, associations of persons.
ITR-6	Companies	All companies except those claiming exemption under Section 11 (charitable trusts).
ITR-7	Trusts, political parties, research institutions	Entities filing under Sections 139(4A), 139(4B), 139(4C), 139(4D).

Form	Who Should File	Key Conditions
ITR-1 (Sahaj)	Salaried individuals, pensioners	Resident individual, total income up to ₹50L, salary or pension + up to two house properties + interest. Aggregate LTCG within ₹1.25L from listed equity/MF now allowed. Ruled out by any STCG, crypto, directorship, unlisted shares, carry-forward losses, foreign assets or non-resident status.
ITR-2	Individuals with capital gains, multiple properties, foreign income	No business or professional income. Any short-term gain, LTCG above ₹1.25L, or gains from property, gold or debt funds. Income above ₹50L. More than two house properties. Foreign assets or income. Crypto transfers (Schedule VDA).
ITR-3	Business owners, professionals (non-presumptive)	Business or professional income computed from actual books. Also the fallback for a presumptive filer whose total income exceeds ₹50L, who has any STCG, or who hits a disqualifying condition. Carries every schedule including CG and VDA.
ITR-4 (Sugam)	Freelancers, small business owners (presumptive)	Total income up to ₹50L. Section 44ADA: 50% of gross receipts, limit ₹50L — ₹75L only if cash receipts are ≤5%. Section 44AD: 8% (6% digital), limit ₹2Cr — ₹3Cr on the same cash test. Section 44AE: goods carriage owners. On house properties, the department's ITR-4 help still refers to one — confirm before filing with two.
ITR-5	Firms, LLPs, AOPs, BOIs	Not for individuals or HUFs. For partnership firms, LLPs, associations of persons.
ITR-6	Companies	All companies except those claiming exemption under Section 11 (charitable trusts).
ITR-7	Trusts, political parties, research institutions	Entities filing under Sections 139(4A), 139(4B), 139(4C), 139(4D).

Which ITR Form Should You File?

What is your primary source of income?

Frequently Asked Questions

Not sure which form applies to you?

Which ITR Form Should You File?

What is your primary source of income?

Frequently Asked Questions

Not sure which form applies to you?