Filing the wrong ITR form is a common mistake that results in a defective return notice from the Income Tax department. The Income Tax department has prescribed specific forms for different categories of taxpayers and income types. Here is a comprehensive guide to choosing the correct ITR form for Assessment Year 2026-27 (Financial Year 2025-26).
ITR-1 (Sahaj) — Salaried Individuals
Who can file: Resident individuals with total income up to ₹50 lakh from:
- Salary or pension income
- One house property (not brought forward losses)
- Other sources (interest, dividends) — not lottery or horse racing
Who cannot file ITR-1: Individuals who are directors in a company, have unlisted equity shares, have agricultural income above ₹5,000, have more than one house property, or are NRIs.
ITR-2 — Individuals and HUFs with No Business Income
Who files: Resident/non-resident individuals and HUFs who cannot file ITR-1 but have no business or professional income. Common filers include:
- Individuals with capital gains (shares, property, mutual funds)
- Individuals with more than one house property
- Directors of companies
- NRIs with Indian income
- Individuals with foreign income or foreign assets
ITR-3 — Individuals and HUFs with Business/Profession Income
Who files: Individuals and HUFs who have income from business or profession (in addition to any other income). This includes proprietors, freelancers, professionals and partners in a firm. If you are running a business and also have salary/capital gains, ITR-3 covers all.
ITR-4 (Sugam) — Presumptive Taxation
Who files: Individuals, HUFs and partnership firms (not LLPs) opting for presumptive taxation under Section 44AD (business) or 44ADA (profession) with turnover up to the applicable limit. Simple, fewer schedules than ITR-3. Cannot be used by directors of companies or those with foreign assets.
ITR-5 — Firms, LLPs, AOPs, BOIs
Who files: Partnership firms, LLPs, Association of Persons (AOPs), Bodies of Individuals (BOIs), co-operative societies, local authorities, and artificial juridical persons. NOT for companies (they file ITR-6) and NOT for individuals.
ITR-6 — Companies
Who files: All companies incorporated under the Companies Act (private limited, public limited, OPC, etc.) except companies claiming exemption under Section 11 (charitable trusts operating as companies). Companies cannot use any other ITR form.
ITR-7 — Trusts, Political Parties and NGOs
Who files: Persons including companies required to file returns under Section 139(4A) — charitable trusts; 139(4B) — political parties; 139(4C) — research associations, hospitals, universities, newspapers, etc.; 139(4D) — universities and colleges.
Conclusion
Selecting the right ITR form is the first step to correct income tax filing. SPOTON's CA team analyses each client's income profile and selects the appropriate form before preparing and filing the ITR. Contact us for expert income tax return filing services in Calicut and Kerala.
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