Which Income Tax Return Form Should You Choose?

Selecting the right Income Tax Return (ITR) form is a key aspect of filing your income tax return. The appropriate ITR form will depend upon the type of assesse, type of income, residential status, turnover/receipts, and other relevant factors.

For FY 2025-26 / AY 2026-27, although the filing process has to be carried out after 1st April 2026, the existing Income Tax Act, 1961 will apply for filing of returns since the new Income Tax Act, 2025 applies to Tax Year commencing from 1st April 2026 onwards.

Overview of ITR Forms

ITR Form	Who can generally file ITR form?
ITR-1 (SAHAJ)	Eligible resident individuals with specified income from salary/pension, house property and other sources, subject to specified limits.
ITR-2	Individuals and HUFs without income from business or profession.
ITR-3	Individuals and HUFs with income from business or profession.
ITR-4 (SUGAM)	Eligible resident individuals, HUFs and firms (except LLPs) under specified presumptive taxation scheme.
ITR-5	Firms, LLPs, AOPs, BOIs, certain societies, trusts, and other specified persons.
ITR-6	Companies except companies claiming tax exemption under specified sections.
ITR-7	Specified persons including certain companies under specified provisions.

Form ITR-1 (SAHAJ)

Form ITR-1 is applicable generally to any eligible resident individual (not being ordinarily resident), whose income from following sources will not exceed ₹50 lakh:

• Salary/Pension
• House Property (either one or two house property under certain conditions)
• Interest/Dividend/Family pension from other sources
• Agricultural Income not exceeding ₹5,000
• Income from long-term capital gains under section 112A up to ₹1.25 lakh under certain prescribed conditions

There are various exclusions for Form ITR-1, and hence taxpayers must verify the condition before choosing the same.

Form ITR-2

Form ITR-2 is generally applicable to individuals and HUFs who do not have any income from profits and gains of any business or profession.

This form may apply if the taxpayer has income like:

• Salary
• Pension
• House Property
• Capital Gains
• Other Sources

and no income from business/profession.

ITR-3

ITR-3 is relevant for Individuals and HUFs with income from profits and gains of business or profession.

It is hence applicable for:

• Businessmen
• Professionals
• Freelancers with income from business or profession
• Individuals with income from business
• Individuals with income from profession

Income Tax Department specifically mentions the applicability of ITR-3 for individuals and HUFs with income from business or profession.

ITR-4 (SUGAM)

ITR-4 is relevant for individuals and HUFs and certain firms other than LLPs, meeting the conditions and computing income from business or profession under presumptive taxation scheme such as:

• Section 44AD
• Section 44ADA
• Section 44AE

The current conditions also include income limits among others.

ITR-5

ITR-5 is typically filed by specific entities including:

• Firms
• LLPs
• AOPs
• BOIs
• Some co-operative societies
• Local bodies
• Business trusts
• Investment trusts
• Certain other specified individuals

The precise applicability will depend upon the nature of the taxpayer and provisions applicable to him.

ITR-6

ITR-6 is generally applicable to companies, except where companies are required to furnish their return in accordance with provisions applicable to persons claiming exemptions under Section 11.

ITR-7

ITR-7 is applicable to persons including some companies, who are required to furnish their return in accordance with provisions applicable to the following persons:

• Charitable or religious trusts
• Political parties
• Certain institutions
• Certain colleges and universities
• And other specified entities

Depending on the relevant statutory provisions.

Simple ITR Form Selection Guide

Income up to ₹50 lakhs + salary + prescribed conditions → ITR-1

Individual/HUF + no business/profession income → ITR-2

Individual/HUF + business/profession income → ITR-3

Eligible Individual/HUF/Firm + presumptive taxation → ITR-4

Firm/LLP/AOP/BOI/other specified entities → ITR-5

Company → ITR-6

Trust/Political Party/Specified Institutions → ITR-7

Important Reminder for FY 2025-26 / AY 2026-27

For income earned in FY 2025-26, the return is furnished in the AY 2026-27 in terms of the provisions of the Income-tax Act, 1961. The new Income-tax Act, 2025 does not affect the governing law for this return.

For Tax Year 2026-27, the new Income-tax Act, 2025 framework will apply, and the Government has framed rules for new Tax Year return forms.

Conclusion

Correct selection of ITR form is crucial for proper income tax compliance. The taxpayer must keep in mind various criteria like type of income, business or profession income, residential status, turnover or total income, capital gain, etc.

Note: The above applicability of the ITR form depends on many detailed conditions and exclusions.