—Guide
Which ITR Form Should You File? A Guide for Individuals, Proprietors and HUFs
How to pick the right ITR form — ITR-1, 2, 3 or 4 — based on your income sources, and what happens if you use the wrong one.
Filing the wrong ITR form is a common mistake, and it can make your return defective. The right form depends on your residential status and sources of income. This guide explains which to use.
Note: this article covers the rules for FY 2025-26 under the Income-tax Act, 1961. The Income-tax Act, 2025 applies from tax year 2026-27, with renumbered provisions and some changes, so check the current position for later years.
ITR-1 (Sahaj)
For resident individuals with total income up to ₹50 lakh from:
- Salary or pension.
- One house property.
- Other sources like interest.
- Long-term capital gains on listed equity up to ₹1.25 lakh, within the conditions for the year.
- Agricultural income up to ₹5,000.
It can't be used by directors of companies, those holding unlisted shares, those with foreign assets or income, or those with business income.
ITR-2
For individuals and HUFs without business or professional income, including those with:
- Capital gains beyond what ITR-1 allows.
- More than one house property.
- Foreign assets or income.
- Directorships or unlisted shares.
- Income above ₹50 lakh.
ITR-3
For individuals and HUFs with income from business or profession, not under the presumptive scheme, including partners in firms.
ITR-4 (Sugam)
For resident individuals, HUFs and firms (other than LLPs) with total income up to ₹50 lakh who declare business or professional income under the presumptive schemes.
What Happens if You Use the Wrong Form
The department can treat the return as defective and ask you to correct it within a set time. If it isn't corrected, the return can be treated as invalid — as if you never filed.
Tips
- Check your AIS before choosing — it shows income you may have forgotten.
- Holding foreign shares or RSUs means ITR-2 or ITR-3, never ITR-1.
- Selling mutual funds or shares during the year often moves you from ITR-1 to ITR-2.
Getting Help
Think Filing picks the right form, reconciles your AIS, and files your return under the lower-tax regime.