Quick answers
- Salaried + one house + interest income up to Rs 50 lakh: ITR-1 (Sahaj).
- Capital gains, foreign income or more than one house: ITR-2.
- Business or professional income (regular books): ITR-3.
- Presumptive income under 44AD/44ADA/44AE up to Rs 50 lakh: ITR-4 (Sugam).
- Firms, LLPs and AOPs/BOIs: ITR-5; Companies: ITR-6; Trusts/political parties: ITR-7.
Why picking the right form matters
A defective return triggers a Section 139(9) notice. If you miss the 15-day correction window, the return is treated as never filed — bringing late fee under 234F, interest under 234A and refund delays.
The wrong form can also disqualify you from carrying forward business losses or claiming foreign tax credit.
What changed for AY 2026-27
The CBDT notified ITR-1 to ITR-7 on 30 March 2026, and the eligibility boundaries moved slightly in your favour. ITR-1 now covers some situations that previously pushed you into ITR-2, so a filer who needed the longer form last year may not need it this year.
Two changes matter most. ITR-1 now accommodates income from up to two house properties, and it allows long-term capital gains under Section 112A up to Rs 1.25 lakh, provided you have no losses to carry forward. Read this alongside our main guide on how to file your ITR for AY 2026-27.
Key terms explained
- Sahaj (ITR-1): the simplest form, for salaried residents with straightforward income.
- Sugam (ITR-4): the presumptive-scheme form for small business and professional income.
- LTCG under Section 112A: long-term capital gains on listed equity and equity mutual funds.
- Schedule VDA: the schedule where virtual digital asset (crypto) income is reported.
- Presumptive taxation: declaring income at a fixed percentage of turnover under Sections 44AD, 44ADA, or 44AE.
The four forms individuals use most
ITR-1 (Sahaj). For a resident individual with total income up to Rs 50 lakh from salary or pension, income from up to two house properties (a change for AY 2026-27), interest income, and agricultural income up to Rs 5,000. For AY 2026-27 it also allows long-term capital gains under Section 112A up to Rs 1.25 lakh, provided there are no losses to carry forward. You cannot use ITR-1 if you are a non-resident, a company director, hold unlisted equity shares, own foreign assets, or have business, crypto, or larger capital gains income.
ITR-2. For individuals and HUFs without business or professional income who have capital gains beyond the ITR-1 limit, more than two house properties, foreign assets, director status, unlisted shares, or VDA income reported in Schedule VDA.
ITR-3. For individuals and HUFs with income from business or profession, including futures and options and intraday trading, which AY 2026-27 forms report separately for clarity.
ITR-4 (Sugam). For a resident individual, HUF, or firm (not an LLP) with total income up to Rs 50 lakh opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE, alongside salary, up to two house properties, and other income.
How to decide, step by step
- List every income source. Salary, house property, capital gains, business, crypto, and foreign income.
- Check your residential status. Non-residents cannot use ITR-1 or ITR-4.
- Check your total income. Above Rs 50 lakh rules out ITR-1 and ITR-4.
- Flag the disqualifiers. Director status, unlisted shares, foreign assets, or VDA income push you to ITR-2 or ITR-3.
- Separate business from non-business. Business or professional income means ITR-3, or ITR-4 if you use the presumptive scheme.
- Confirm on the portal. Cross-check the portal's suggestion against your own analysis before filing.
ITR form selector
| Form | Who can file | Cannot use if |
|---|---|---|
| ITR-1 (Sahaj) | Resident individual, salary/pension/one house/interest, income ≤ Rs 50 lakh | Director, unlisted shares, capital gains, foreign income |
| ITR-2 | Individual/HUF without business income — incl. capital gains, foreign assets | Income from business or profession |
| ITR-3 | Individual/HUF with business or professional income (regular books) | Trusts, firms, companies |
| ITR-4 (Sugam) | Resident with presumptive income 44AD/44ADA/44AE, income ≤ Rs 50 lakh | Foreign income/asset, more than one house |
| ITR-5 | Partnership firms, LLPs, AOP, BOI, AJP | Individual, HUF, companies, Section 11 trusts |
| ITR-6 | Companies other than those claiming Section 11 exemption | Section 11 trusts, individuals |
| ITR-7 | Trusts, political parties, research institutions filing under 139(4A)-(4D) | Regular taxpayers |
Common mistakes to avoid
- Filing ITR-1 despite earning capital gains from shares — must use ITR-2 instead.
- Filing ITR-4 with foreign income — Sugam disqualifies foreign assets/income.
- Directors and unlisted shareholders mistakenly using ITR-1 — they must use ITR-2/3.
- LLPs filing ITR-6 — companies use ITR-6, LLPs use ITR-5.
Penalties on wrong filing
Defective return — Section 139(9): rectify within 15 days; else treated as not filed.
Late fee — Section 234F: Rs 5,000 (Rs 1,000 if total income ≤ Rs 5 lakh).
Interest — Section 234A: 1% per month from the due date till filing.
Key takeaways
- Salary + one house + interest, total ≤ Rs 50 lakh → ITR-1.
- Capital gains / foreign assets / director / unlisted shares → ITR-2.
- Business income (regular books) → ITR-3; presumptive ≤ Rs 50 lakh → ITR-4.
- Firms/LLPs → ITR-5; Companies → ITR-6; Trusts → ITR-7.
- Verify within 30 days — return is incomplete until e-verified.
Frequently asked questions
- Konsa ITR form chunau? Income source aur taxpayer type ke basis pe — chart use karein.
- I am a freelancer with Rs 30 lakh — can I file ITR-4? Yes, under Section 44ADA if professional, presumptive at 50%.
- What if I file the wrong form? You get a Section 139(9) notice — fix within 15 days.
- Can salaried + crypto income use ITR-1? No — crypto/VDA income forces ITR-2 (or ITR-3 if business).
- Is ITR-2 mandatory for NRIs? Yes, NRIs generally file ITR-2 (or ITR-3 if business income).
- Director ke liye konsa form hai? ITR-2 (no business) or ITR-3 (with business income).
- What if I have multiple house properties? ITR-1 now covers up to two for AY 2026-27; beyond that, ITR-2 (or ITR-3 with business income).
- Does ITR-4 allow audit cases? No — if 44AB audit applies, you cannot use ITR-4.
Not sure which form fits your income?
Capital gains, crypto, F&O, or director status can each move you to a different form, and getting it wrong means a defective-return notice and a refile. You can read how the Regikart team prepares and reviews returns on our income tax filing page, or contact us / WhatsApp +91 70444 94804 (Mon-Sat, 9 am-7 pm IST).
About the author
Rohit
Senior Advisor at Regikart. Want to discuss this in the context of your business?
