Which ITR Form Should You File in India? (ITR-1 to ITR-7 Explained)

Choosing the correct Income Tax Return (ITR) form is a foundational step in tax compliance. Each year, many taxpayers calculate their tax correctly but still face issues because they selected the wrong ITR form.

The Income Tax Department prescribes different ITR forms for different income structures. If the form does not match your income profile, the return can be treated as defective or invalid, even if taxes are fully paid.

This guide explains ITR-1 to ITR-7, with practical examples, decision logic, and common mistakes - so you can file confidently.

Applicable for Assessment Year (AY) 2025–26 | Financial Year (FY) 2024–25
ITR forms and rules are notified by the Central Board of Direct Taxes (CBDT).

Who Is Required to File an Income Tax Return in India?

You must file an ITR if any of the following apply:

• Your total income before deductions exceeds:
  • ₹2.5 lakh (below 60 years)
  • ₹3 lakh (senior citizens)
  • ₹5 lakh (super senior citizens)
• You want to claim a refund of TDS or excess tax paid
• You are a director in a company
• You hold unlisted shares
• You have foreign income or foreign assets
• You are an NRI or RNOR
• You need ITR for loan, visa, or official documentation

Filing is allowed even if income is below the exemption limit, but becomes mandatory only under specified conditions.

Why Choosing the Correct ITR Form Matters

• Return may be marked defective under Section 139(9)
• Refunds may be withheld or delayed
• Mandatory revision or refiling
• Late fees and avoidable follow-ups

Important distinction:
Tax calculation and ITR selection are separate. A lower tax liability does not justify using a simpler ITR form.

ITR-1 (SAHAJ): For Simple Salary-Based Income

You can file ITR-1 if all conditions are met:

• Income from salary or pension
• Income from one house property (no carried-forward loss)
• Income from other sources
• Total income ≤ ₹50 lakh

You cannot file ITR-1 if you have:

• Capital gains (equity, mutual funds, crypto, property)

→ See: Capital gains overview

• Business or professional income
• Status as a company director
• Unlisted shares
• Foreign income or assets
• NRI or RNOR status

ITR-2: For Investors, Directors, and NRIs

File ITR-2 if you have:

• Salary or pension income
• Capital gains from shares, mutual funds, property, or crypto

(Mutual fund investors can also refer to: Mutual Fund Taxation in India

• Income from more than one house property
• Status as a company director
• Unlisted shares
• Foreign income or foreign assets
• Residential status as NRI or RNOR

You cannot file ITR-2 if:

• You have business or professional income

ITR-2 is purely a non-business return, regardless of income amount.

ITR-3: For Business Owners and Professionals

File ITR-3 if:

• You earn income from business or profession
• You are a freelancer or consultant not opting for presumptive taxation
• You are a partner in a partnership firm
• You are a director earning business income
• You maintain books of accounts

ITR-3 also allows reporting of:

• Salary income
• Capital gains
• House property income
• Other sources

Important: If business income exists and presumptive taxation is not chosen, ITR-3 is mandatory.

ITR-4 (SUGAM): For Presumptive Taxation Cases

You can file ITR-4 only if all conditions are satisfied:

• You opt for presumptive taxation under:
  • Section 44AD (eligible business)
  • Section 44ADA (specified professions)

  Helpful read: Section 44ADA (Presumptive Tax) Explained with Real Numbers

  • Section 44AE (goods carriages)
• Total income ≤ ₹50 lakh
• Income from only one house property
• No capital gains
• Not a company director
• No unlisted shares
• No foreign income or foreign assets
• No loss carry forward

Note: Presumptive taxation simplifies calculation - not reporting obligations.

ITR-5: For Firms, LLPs, and Other Non-Individual Entities

File ITR-5 if you are:

• A partnership firm
• A Limited Liability Partnership (LLP)
• An Association of Persons (AOP)
• A Body of Individuals (BOI)
• An Artificial Juridical Person
• Estate of a deceased or insolvent person
• Business trust or investment fund

Key points:

• ITR-5 is never applicable to individuals
• Partners file personal income separately (usually ITR-3 or ITR-2)
• LLPs cannot opt for presumptive taxation

ITR-6: For Companies Registered Under the Companies Act

File ITR-6 if:

• You are a company registered under the Companies Act, 2013 or Companies Act, 1956
• You are a private limited company or a public limited company
• The company has income, loss, or no business activity during the year

Key compliance points:

• Digital Signature Certificate (DSC) is mandatory for filing ITR-6
• Tax audit provisions apply wherever applicable
• Minimum Alternate Tax (MAT) provisions may apply unless specifically exempt

Important: Companies claiming exemption under Section 11 are not eligible to file ITR-6.

ITR-7: For Trusts, Charitable & Religious Institutions

File ITR-7 if income is derived from:

• Property held under charitable or religious trust
• Income claiming exemption under Sections 10, 11, or 12
• Income of political parties under Sections 13A or 13B

Applicable to:

• Charitable and religious trusts
• Non-governmental organisations (NGOs)
• Universities and educational institutions
• Hospitals and medical institutions
• Political parties

Compliance note: Filing ITR-7 is mandatory to continue claiming tax exemption, even if there is no taxable income.

Common Real-Life Scenarios

Final Thoughts

Choosing the correct ITR form is not about saving tax - it’s about accurate disclosure and smooth processing.

When unsure, always choose the more comprehensive ITR form.

Disclaimer: This article is for informational purposes only and should not be treated as tax advice.