🧭 Why Choosing the Right ITR Form Matters
Which ITR Form Should I File is a common question for almost all taxpayers. Following are the reasons-
- ⏳ Prevents rejections or notices due to defective filing.
- 🛡️ Ensures correct disclosure and maximizes eligible benefits/deductions.
- 🧾 Supports seamless tax refund processing when filed accurately.
🗂️ ITR Form Comparison at a Glance
| ITR Form | Applicable Taxpayers | Income Covered | Deductions Allowed |
|---|---|---|---|
| ITR-1 (Sahaj) | Resident individuals (up to ₹50L) w/ salary/pension, 1 house property, ≤₹10K other income | Salary, pension, interest, one house property | 80C, 80D, 80TTA, HRA |
| ITR-2 | Individuals & HUFs (no business income) | Salary, capital gains, multiple properties, foreign income, income >₹50L | All except business losses |
| ITR-3 | Individuals/HUFs with business/p profession | Business income (Audit) + all covered under ITR-2 | All including business losses |
| ITR-4 (Sugam) | Residents (≤₹50L turnover) opting presumptive scheme | Business/profession via 44AD/44ADA, salary, interest, one house property | Presumptive income rates |
| ITR-5 | Firms, LLPs, AOPs, BOIs (excluding trusts & companies) | Business, partnership income | As per business rules |
| ITR-6 | Companies (except trusts and charitable) | Business & other incomes | Corporate deductions |
| ITR-7 | Trusts, NGOs, political parties, scientific institutions | Income from exempt sources, trust funds | As per Section 11–13 |
🎯 Which Form Applies to You?
| Income Type | ITR-1 | ITR-2 | ITR-3 | ITR-4 | ITR-5/6/7 |
|---|---|---|---|---|---|
| Salary/Pension | ✅ | ✅ | ✅ | ✅ | ❌ |
| Interest/Dividend Income | ✅ | ✅ | ✅ | ✅ | ✅ |
| ≤ 1 House Property Income | ✅ | ✅ | ✅ | ✅ | ❌ |
| > 1 House Property | ❌ | ✅ | ✅ | ❌ | ❌ |
| Short-term Capital Gains | ❌ | ✅ | ✅ | ❌ | ✅ |
| Long-term Capital Gains | ❌ | ✅ | ✅ | ❌ | ✅ |
| Business/Profession Income | ❌ | ❌ | ✅ | ✅* | ✅ |
| Presumptive Business Income | ❌ | ❌ | ✅ | ✅(44AD/44ADA) | ✅ |
| Foreign Income | ❌ | ✅ | ✅ | ❌ | ✅ |
| Agricultural or Exempt Income | ❌ | ✅ | ✅ | ❌ | ✅ |
| Audit Required Income | ❌ | ❌ | ✅ | ❌ | ✅ |
* Presumptive scheme under Sec 44AD/44ADA.
🔍 Detailed Form Profiles
📘 ITR-1 (Sahaj)
- Who: Residents with ₹50L or less total income from salary, interest, and up to one house property.
- Why choose? Simplified form, easy to file.
- Avoid if: Own multiple properties, earn capital gains, or business income.
📗 ITR-2
- Who: Individuals/HUFs without business income but have capital gains, foreign income, or more than ₹50L income.
- Why choose? Covers complex income sources.
- Avoid if: You earn business or profession income.
📘 ITR-3
- Who: Individuals/HUFs with business/professional earnings needing audit or opting for presumptive taxation.
- Why choose? Comprehensive for business owners, freelancers, or consultants.
- Avoid if: You only have salary, interest, or capital gains.
📗 ITR-4 (Sugam)
- Who: Residents with presumptive scheme business income ≤₹50L.
- Why? Simple, minimal computation required.
- Avoid if: You maintain detailed books or have audits.
📘 ITR-5, ITR-6, ITR-7
- Who: Suitable for firms, companies, LLPs, AOPs, trusts, NGOs.
- Select based on entity type and applicable exemption provisions.
💡 Case Scenarios: Form Selection Cheatsheet
| Scenario | Choose Form |
|---|---|
| Employee with salary + FD interest | ITR‑1 |
| Freelancer + house property + capital gains | ITR‑3 |
| Business turnover ₹30L on presumptive scheme | ITR‑4 |
| NRI with salary, FD, foreign dividends | ITR‑2 |
| LLP with ₹1Cr revenue | ITR‑5 |
| Educational trust with donations | ITR‑7 |
📊 Flowchart
Start → Salary? → Yes → Others? (Interest only? → ITR‑1; Capital gains → ITR‑2)
No → Business income? → Yes → Audit? (Yes → ITR‑3; No + presumptive → ITR‑4)
No → Entity type? → LLP/Company → ITR‑5/6/7 accordingly
✅ Additional Tips for Form Selection
- Income > ₹50L? Avoid ITR‑1 & ITR‑4.
- More than one house property? Mandates at least ITR‑2.
- Audit required? Go with ITR‑3, 4, or 5 based on business regime.
- Foreign income? Only covered by ITR‑2, 3, 5, 6.
- Exempt/tax-free income? Disclose under Schedule EI; ITR‑2+ required.
🔗 Internal Links
🌐 External Reference
- 🔗 Income Tax Department Homepage
❓ Frequently Asked Questions (FAQs)
Q1. Can I switch forms for revised filing?
Yes. If your income pattern changes (e.g., gain from business or capital gains), you can refile using the correct ITR form before the revised deadline.
Q2. What if multiple returns apply?
Choose the highest applicable form (e.g., ITR‑3 is broader than ITR‑2, ITR‑4 is limited to presumptive business).
Q3. Are ITR‑5, 6, and 7 mandatory for all entities?
Yes. Firms/LLPs and companies must use ITR‑5/6; charities and trusts use ITR‑7 even if income is exempt.
Q4. How do NRIs file?
NRIs without business use ITR‑2 (salary/interest); with business, form selection follows resident rules minus FRA specifics.
Q5. Is audit compulsory for testing form validity?
Only if turnover/professional gross receipts exceed thresholds (e.g., ₹1Cr turnover for business under ITR‑3).
Media-
Go through Common Issues while filing ITR & their respective solutions | #incometax
