Which ITR form should I file? A simple guide

The right ITR form depends on your income and your situation. ITR-1 is for simple salary, pension, one house and interest income. ITR-2 is for people without business income who have capital gains, more than one house, foreign assets or similar. ITR-3 is for business or profession income with books of account. ITR-4 is for business or profession income under the presumptive scheme.

The rules below are the ones TaxCare applies for the tax year 2025-26. The forms for the tax year 2026-27 have not been published yet, so these limits will be re-checked when the 2026-27 forms and rules are released.

The four forms at a glance

A HUF never files ITR-1.

Step 1: Can you use ITR-1?

You can use ITR-1 only if all of these are true:

• You are a resident individual (not a non-resident, and not "resident but not ordinarily resident").
• Your total income is ₹50 lakh or less.
• You have income only from salary or pension, one house property and other sources such as interest.
• Your long-term capital gains on listed shares or equity mutual funds are ₹1,25,000 or less, and you have no other capital gains.
• Your agricultural income is ₹5,000 or less.
• You have no lottery or race horse income.
• You have no loss to set off or carry forward.
• You do not hold foreign assets or have foreign income.
• You are not a director in a company and do not hold unlisted shares.
• No TDS has been deducted on cash withdrawals, and you have no deferred tax on start-up ESOPs.
• No one else's income is added to yours (clubbing).
• You have no business or professional income.

If every point is true, file ITR-1.

Step 2: Do you have business or profession income?

If you earn from a business or profession, ITR-1 is out. Now decide between ITR-3 and ITR-4.

ITR-4 works if both of these are true:

• Your business or professional income is computed only under the presumptive schemes (sections 44AD, 44ADA or 44AE of the 1961 Act).
• You meet the other ITR-1 conditions above, such as income up to ₹50 lakh and one house.

ITR-3 applies if you keep full books of account, opt out of the presumptive scheme, or have speculative or F&O income.

From the tax year 2026-27 the Income-tax Act, 2025 gathers these three presumptive schemes into a single section 58.

Step 3: Otherwise, it is ITR-2

If you have no business or profession income but you fail an ITR-1 condition, you file ITR-2. The common reasons are:

• Capital gains from shares, mutual funds, property or other assets beyond the ITR-1 limit.
• More than one house property.
• Income above ₹50 lakh.
• Foreign assets or foreign income.
• Being a director or holding unlisted shares.
• A loss to carry forward.
• Being a non-resident or a resident not ordinarily resident.

What about ITR-5, ITR-6 and ITR-7?

These forms are for other kinds of taxpayer: ITR-5 for firms and similar bodies, ITR-6 for companies, and ITR-7 for persons, including companies, who file under sections 139(4A) to 139(4D) of the 1961 Act, such as charitable trusts and institutions.

TaxCare's guided filing covers ITR-1 to ITR-4 for individuals and HUFs. For other cases, a Tax Expert can help.

Quick examples

• A salaried employee with a bank interest income and one home loan: ITR-1.
• A salaried employee who sold shares at a profit of ₹3,00,000 after holding them for more than a year: ITR-2.
• A designer who invoices clients and opts for presumptive tax: ITR-4.
• A shop owner with full books and a tax audit: ITR-3.
• A salaried person with a second house that is rented out: ITR-2.

What if you pick the wrong form?

The department can treat the return as defective and send a notice under section 139(9) of the 1961 Act. You get 15 days from the notice to correct the defect, and a longer time if the officer allows it on your application. If you do not fix it, the return can be treated as invalid, as if you had not filed. You respond on the e-filing portal under Pending Actions > e-Proceedings. If the due date has not passed, you can also file a fresh or revised return with the right form. If the new return is filed late, the late fee and interest can apply.

How TaxCare helps

TaxCare picks the form from your data instead of asking you to choose. It looks at your salary, house property, capital gains, business income and other facts, starts from the simplest form the rules allow and moves up only when something requires it. It also shows you why, for example "your capital gains move you to ITR-2". If the data points to a case that only a Tax Expert files, such as TDS on cash withdrawals, TaxCare hands the return to one.

This guide gives general information and is not professional tax advice.