Choosing the wrong ITR (Income Tax Return) form is a common mistake that leads to defective return notices and compliance issues. The Income Tax Department issues different forms for different categories of taxpayers. Here is the complete guide to selecting the correct ITR form for FY 2025-26 (AY 2026-27).
ITR-1 (Sahaj) — For Simple Salaried Taxpayers
Who can file ITR-1:
- Resident individuals with total income up to ₹50 lakh
- Income from salary/pension only
- Income from one house property (not let-out with loss)
- Income from other sources (savings interest, dividend) — not capital gains
Who CANNOT use ITR-1: Non-residents, those with capital gains, agricultural income above ₹5,000, foreign assets, directors of companies, unlisted equity shareholders, business income.
ITR-2 — For Individuals with Capital Gains
Who files ITR-2:
- Individuals and HUFs with income from capital gains (stocks, property, mutual funds)
- Income from foreign assets/sources
- Multiple house properties
- Non-residents (NRIs) with Indian income
- Individuals with agricultural income above ₹5,000
- Directors of companies or unlisted equity shareholders
- Total income above ₹50 lakh (even if only salary)
ITR-3 — For Business/Professional Income
Who files ITR-3:
- Individuals and HUFs with business or professional income
- Partners in a partnership firm (for their share of firm income + personal income)
- Those with income from all sources who don't qualify for ITR-4
ITR-4 (Sugam) — For Presumptive Taxation
Who files ITR-4:
- Individuals, HUFs and firms (not LLPs) opting for presumptive taxation under Section 44AD, 44ADA or 44AE
- 44AD: Business with turnover up to ₹3 crore — declare 6%/8% as income
- 44ADA: Professionals with receipts up to ₹75 lakh — declare 50% as income
- 44AE: Goods transport operators (max 10 vehicles)
- Total income from all sources must not exceed ₹50 lakh
Other ITR Forms
- ITR-5: Partnerships, LLPs, AOPs, BOIs, cooperative societies
- ITR-6: Companies (except Section 11 charitable institutions)
- ITR-7: Trusts, political parties, scientific institutions filing under Section 139(4A-4D)
Conclusion
ITR form selection is the first and most important step in accurate return filing — the wrong form leads to defective return notices and possible penalties. SPOTON files all ITR forms (ITR-1 through ITR-7) for individuals, HUFs, firms and companies across Kerala. Contact us for expert income tax return filing services.
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