Assessment year 2026-27 is the return for income earned in FY 2025-26, filed under the 1961 Act for the last time. The salaried deadline of 31 July 2026 and the non-audit business deadline of 31 August 2026 have passed; audit cases run to 31 October 2026, and anyone else can still file a belated return until 31 December 2026 with a late fee. Whatever the timing, the form question comes first, because the wrong one does not get you a refund and can get you a notice.
The seven forms in one line each
- ITR-1 (Sahaj). Resident individual, total income up to ₹50 lakh, from salary or pension, one house property and other sources, with agricultural income up to ₹5,000 and the 112A gains allowance described below.
- ITR-2. Individuals and HUFs with no business or professional income: capital gains, more than one property, income above ₹50 lakh, foreign assets, directorships, unlisted shares, non-residents, losses to carry forward.
- ITR-3. Individuals and HUFs with income from business or profession, including partners in firms, F&O and intraday traders, and anyone who keeps books.
- ITR-4 (Sugam). Resident individuals, HUFs and partnership firms (not LLPs) with total income up to ₹50 lakh declaring business or professional income on a presumptive basis under 44AD, 44ADA or 44AE.
- ITR-5. Partnership firms, LLPs, AOPs, BOIs and similar entities that are not companies and not ITR-7 filers.
- ITR-6. Companies, other than those claiming exemption as charitable institutions under section 11.
- ITR-7. Trusts, charitable and religious institutions, political parties, research associations, universities and others required to file under sections 139(4A) to 139(4D).
The decision table, by what you earned
Read the table top to bottom and stop at the first row that applies. Every row further down the table takes precedence over the rows above it: a salaried person who is also a director is an ITR-2 filer, not an ITR-1 filer, and a presumptive shopkeeper with F&O losses is on ITR-3, not ITR-4.
| What you have | Form | The condition that decides it |
|---|---|---|
| Salary or pension only, bank interest, one self-occupied or let-out house | ITR-1 | Resident, total income up to ₹50 lakh, no loss brought forward |
| Two or more house properties, or a house-property loss to carry forward | ITR-2 | ITR-1 and ITR-4 allow exactly one property |
| Long-term gain on listed shares or equity funds under 112A up to ₹1.25 lakh | ITR-1 or ITR-4 | Allowed from AY 2025-26 only if there is no capital loss to set off or carry forward |
| Any other capital gain: short-term equity, 112A gains above ₹1.25 lakh, property, gold, debt funds, crypto or other VDAs | ITR-2 | ITR-3 instead if you also have business income; VDA goes in its own schedule |
| Business under 44AD (turnover up to ₹2 crore, or ₹3 crore with cash receipts at 5% or less) | ITR-4 | Declare at least 8% of turnover (6% for digital receipts); total income within ₹50 lakh |
| Profession under 44ADA (receipts up to ₹50 lakh, or ₹75 lakh with cash at 5% or less) | ITR-4 | Declare at least 50% of receipts; only the notified professions qualify |
| Goods carriage business under 44AE | ITR-4 | Up to ten vehicles at any time in the year |
| Business or profession with books of account, or receipts above the presumptive limits | ITR-3 | Balance sheet and P&L required; tax audit if 44AB applies |
| F&O, intraday or commodity trading, even at a loss | ITR-3 | Business income, not capital gains; turnover computed on absolute profit and loss |
| Partner in a firm (share, remuneration or interest) | ITR-3 | Partnership income is business income for the partner |
| Director in any company, or holding any unlisted equity shares, including startup ESOPs | ITR-2 or ITR-3 | ITR-1 and ITR-4 are barred outright |
| Foreign assets, foreign bank account, foreign ESOPs or RSUs, or foreign income | ITR-2 or ITR-3 | Schedule FA is mandatory for a resident; missing it carries a separate penalty |
| Non-resident or resident but not ordinarily resident | ITR-2 or ITR-3 | ITR-1 and ITR-4 are for ordinarily residents only |
| Total income above ₹50 lakh, agricultural income above ₹5,000, lottery or race-horse winnings, TDS under 194N | ITR-2 or ITR-3 | Each is a stated exclusion from ITR-1 and ITR-4 |
| Partnership firm or LLP | ITR-5 | ITR-4 is available only to a non-LLP firm on presumptive income |
| Private or public company | ITR-6 | Includes a company with no revenue in the year |
| Trust, NGO, section 8 company, political party, educational institution | ITR-7 | Filed under 139(4A) to 139(4D) with audit report where required |
Three rows that need a longer look
The 112A allowance on ITR-1 and ITR-4
Until AY 2024-25, one SIP redemption forced a salaried person onto ITR-2. From AY 2025-26 the simple forms accept long-term gains on listed equity and equity funds under section 112A, provided the gain is within the ₹1.25 lakh exemption and there is no capital loss of any kind to set off or carry forward. The allowance is deliberately narrow. A short-term gain of ₹500, a debt-fund redemption, a gain on gold, or a loss on any equity sale in the same year takes the whole return to ITR-2. If you hold equity at all, pull the capital gains statement from every AMC and broker before deciding the form.
Presumptive on ITR-4, but only wholly presumptive
ITR-4 assumes everything that is business or profession in your return is on a presumptive basis. A consultant on 44ADA who also has a small trading account, a shopkeeper on 44AD with a commission agency (which 44AD excludes), or a professional whose receipts crossed the limit mid-year cannot use it. ITR-4 also has no room for a carried-forward loss, so the year after a bad ITR-3 year is usually another ITR-3 year. Our presumptive taxation guide covers the five-year lock-in and the audit trap when you leave the scheme early.
F&O is business income, whatever your day job
A salaried engineer who lost ₹40,000 in options is a business filer for that year. The loss is non-speculative business loss; reported on ITR-3 it sets off against other income except salary, and the balance carries forward for eight years. Reported nowhere, or as a capital loss on ITR-2, it is gone. Turnover for F&O is the sum of absolute profits and losses, and once it crosses the 44AB thresholds an audit follows. If you are not sure whether you have crossed them, the tax audit and ITR form checker answers both questions from your turnover and profit.
Common wrong-form mistakes we see
- ITR-1 with a second flat. A vacant second property is still a second house property with deemed rent. ITR-2.
- ITR-1 by a startup employee holding ESOPs. Exercised options in an unlisted company are unlisted shares, which bar ITR-1 even if the shares are worth nothing yet.
- ITR-2 for F&O losses booked as capital loss. Wrong head, wrong form, and the loss cannot be set off in later years the way a business loss can.
- ITR-4 for a partner. Remuneration and interest from a firm are business income of the partner and need ITR-3; ITR-4 has no schedule for them.
- ITR-1 by someone who was abroad for most of the year. Residential status is a day count. An NRI on ITR-1 is a defective return, and salary earned abroad may not be taxable in India at all.
- ITR-1 or ITR-4 with crypto. Virtual digital assets go in Schedule VDA on ITR-2 or ITR-3, taxed at 30% with no loss set-off. The exchange has already reported the trade against your PAN.
- ITR-2 by a freelancer with TDS under 194J. Professional fees are profession income. ITR-4 on 44ADA or ITR-3 with books, never ITR-2.
What a wrong form costs: section 139(9)
A return on a form you are not eligible for is a defective return. The department issues a notice under section 139(9) listing the defect and gives 15 days to file a corrected return; an extension can be requested on the portal. Fix it in time and the original filing date stands. Miss it and the return is treated as invalid, as though it was never filed. From that point you are a non-filer for the year: the 234F late fee applies, interest under 234A runs on any tax due, any loss you meant to carry forward is lost because a loss return must be filed by the due date, and a refund waits until a valid return exists. A defective-return notice is also the point at which the AIS mismatches on the same return tend to get noticed.
If you spot the error yourself, do not wait. A revised return under 139(5) on the correct form can be filed until 31 December of the assessment year, and it replaces the original without a notice. Our guide to belated and revised returns has the dates and the fee schedule.
A short checklist before you pick
- Count days in India for the year: below 182 (with the other tests) and you are on ITR-2 or ITR-3 regardless of income.
- Download the AIS. Every broker sale, every mutual-fund redemption, every crypto trade and every dividend is there, and each one is a potential form change.
- List every company you are a director in and every unlisted share you hold, including ESOPs and shares in a family company.
- Check for a foreign bank account, foreign stock plan or foreign pension, even a dormant one.
- Add up house properties, including the one that is empty.
- Ask whether any receipt is business income: F&O, freelance fees, rent from a business asset, commission.
Where we come in
Every ITR filing plan starts with the AIS and this table, so the form is decided by the data and not by what was filed last year. The pages for salaried employees, investors and traders and freelancers and professionals set out what each of them usually needs and what it costs. For the rates themselves, see the slab guide.
Frequently asked questions
Can I file ITR-1 if I have capital gains?
Only in one narrow case. From AY 2025-26, ITR-1 and ITR-4 accept long-term capital gains on listed equity shares and equity mutual funds under section 112A up to ₹1.25 lakh, with no loss to set off or carry forward. Any short-term gain, any gain above ₹1.25 lakh, any gain on property, gold, debt funds or crypto, or any capital loss pushes you to ITR-2 (or ITR-3 if you also have business income).
Which ITR form is for F&O trading?
ITR-3. Futures and options income is non-speculative business income, not capital gains, so it needs a form with a profit and loss account. This applies even to a salaried person with a small F&O loss, and reporting the loss is the only way to carry it forward for eight years. Intraday equity is speculative business income and also goes on ITR-3.
ITR-3 or ITR-4 for a freelancer?
ITR-4 if you declare income on a presumptive basis under 44ADA (gross receipts up to ₹50 lakh, or ₹75 lakh if at least 95% is received other than in cash), your total income is within ₹50 lakh, and none of the ITR-4 exclusions apply. If you keep books and claim actual expenses, or your receipts are above the limit, it is ITR-3.
What happens if I file the wrong ITR form?
The department can treat the return as defective under section 139(9) and send a notice giving you 15 days to file a corrected return. If you do not respond in time, the return is treated as invalid, as though never filed, which brings the late-filing fee under 234F, interest, and the loss of any carried-forward loss. If you notice the mistake yourself, file a revised return before 31 December of the assessment year instead of waiting for the notice.
Which form does an NRI use?
ITR-2 if there is no business or professional income in India, and ITR-3 if there is. ITR-1 and ITR-4 are restricted to residents, so a non-resident cannot use either even for a plain salary or a single rented flat. Residential status is decided by days in India in the year, not by passport or where the salary is paid.
This article is general information, not professional advice. Form eligibility is set by the rules notified each year; confirm the position for your own return before filing.
