Which ITR form should you file? ITR-1 to ITR-4 explained with examples

There are seven ITR forms, but most individuals and small businesses use only four: ITR-1 (Sahaj), ITR-2, ITR-3 and ITR-4 (Sugam). The right form depends on your residential status, the type of income you have, your total income and a few special conditions such as directorship or foreign assets.

This guide is for returns of FY 2025-26 (AY 2026-27), filed in 2026 under the Income-tax Act, 1961. Forms for Tax Year 2026-27 will be notified under the Income-tax Rules, 2026 before the 2027 season.

Quick decision table

ITR-1 (Sahaj): who can and cannot use it

Can use: a resident and ordinarily resident individual with total income up to ₹50 lakh from salary or pension, house property, other sources (interest, family pension, dividend) and agricultural income up to ₹5,000. LTCG under Section 112A up to ₹1.25 lakh is also allowed. Check the form instructions for the number of house properties permitted for the year.

Cannot use if you:

• are a non-resident or RNOR;
• have total income above ₹50 lakh;
• are a director in a company, or held unlisted equity shares at any time in the year;
• have any capital gains other than the small 112A gain;
• have business or professional income;
• have foreign assets, foreign income or signing authority in a foreign account;
• have income to be clubbed that disqualifies, deferred tax on ESOPs from an eligible start-up, or brought-forward/carry-forward losses under any head.

ITR-2: individuals and HUFs without business income

ITR-2 covers everything ITR-1 does plus capital gains of any kind, more house properties, foreign assets and income, directorship, unlisted shares, total income above ₹50 lakh and non-residents. It has detailed schedules for capital gains (shares, property, mutual funds), Schedule FA for foreign assets and Schedule AL for assets and liabilities where income exceeds ₹1 crore (verify the current threshold for the year).

ITR-3: business or professional income

ITR-3 applies to individuals and HUFs having income from a business or profession that is not offered under the presumptive scheme, including:

• traders and manufacturers maintaining books;
• doctors, lawyers, consultants declaring actual profit;
• intraday and F&O traders;
• partners in a firm receiving salary, interest or share of profit.

It requires a balance sheet and profit and loss account, and audit details where applicable.

ITR-4 (Sugam): presumptive income

ITR-4 is for residents (individuals, HUFs and partnership firms other than LLPs) whose business or professional income is computed under Sections 44AD, 44ADA or 44AE, with total income up to ₹50 lakh. ITR-4 cannot be used by directors, those with unlisted shares, foreign assets, or capital gains other than the small 112A gain, or anyone with brought-forward losses.

Worked examples

You can check your case with our ITR form selector.

Points people miss

• Directorship in a private company – even a family company with no salary – rules out ITR-1 and ITR-4.
• Foreign ESOPs or RSUs – a resident holding shares of a foreign employer must use ITR-2/ITR-3 and fill Schedule FA, even if no shares were sold.
• Loss on F&O – needs ITR-3 to carry forward the loss, and timely filing.
• Clubbing of income – income of a minor child or spouse clubbed with yours may change the form.
• Exempt income above ₹5,000 from agriculture – needs ITR-2 or ITR-3.

How to correct a wrong form

If you discover the error before processing, file a revised return in the correct form within the revised-return window (now up to 31 March after the year, with a fee after 31 December following Budget 2026). If a defective-return notice under Section 139(9) is received, respond within 15 days by filing the return in the right form. Ignoring it makes the return invalid.

Key takeaway

Start by listing every source of income and every asset, then rule forms out: business income → ITR-3 or ITR-4; capital gains, foreign assets, directorship or NRI → ITR-2; otherwise ITR-1. For a review before you file, our ITR filing team handles salaried, business, NRI and capital-gains returns.