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Choosing a proper Income Tax Return (ITR) form requires some prior information and is an important step in the filing process. There are numerous ITR forms provided by the Indian tax authorities ITR forms for different categories of tax payers and source of income. Proper selection is necessary because incorrect selection will lead to unnecessary hassle with the authorities.
Generally, tax forms are categorized based on the income received within a particular financial period. Below is a list of common forms with descriptions of their use and scope:
Form ITR-1 (Sahaj): Eligible for features marked as income under the upper cap of ₹50 lakh for any for resident Individual. It accepts income arising from employment for salaried positions, pension payments, one house property, other sources (including dividends, interest) complemented by agricultural income capped at ₹5,000. Notable restrictions include individual directors of a company, holders of unlisted equity shares, individuals possessing income from other nations and RNORs do not qualify.
ITR-2: The ITR-2 form applies to individuals and Hindu Undivided Families (HUFs) who may not qualify for an ITR-1, but do not earn from business or professional activities. this form is applicable if there is income from salary or pension, house property, capital gains, income from other sources such as lottery and card games, foreign assets, or agricultural income above ₹5,000.
ITR-3: This form suits best for individuals or HUFs earning income from profits and gains of business or profession. It also includes income from salary, pension, house property, capital gains, and other sources.
ITR-4 (Sugam): This form is under the presumptive income scheme and is designed for resident individuals, HUFs, and firms except LLPs. This form will apply if you have total turnover or gross receipts not exceeding ₹2 crores and your income would be estimated to be 8% of turnover from business or 50% of gross receipts from profession, as per sections 44AD, 44ADA or 44AE of the Income Tax Act. Also, like ITR-1, it cannot be used if there is income from foreign assets/income or directorships and unlisted equity shares.
As a reminder, ensure you are filing an accurate return for the Assessment Year 2025-26 by closely inspecting the detailed eligibility criteria for each ITR form available.
