Filing your Income Tax Return (ITR) for Assessment Year (AY) 2026-27 begins with one crucial step, selecting the correct ITR form. Choosing the wrong form can render your return “defective” under Section 139(9) of the Income Tax Act, leading to an income tax notice and potential delays in processing refunds.
If a defective return is identified, taxpayers are typically given 15 days to rectify the error. Failure to respond within the prescribed timeline could result in the return being treated as invalid, exposing taxpayers to penalties, scrutiny assessments, and rejection of tax refunds.
The Income Tax Department has set seven different ITR forms, each designed for specific categories of taxpayers based on their income sources, residential status, and nature of earnings.
Let’s look at the seven ITR forms and find the one that is for you.
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7 Types of ITR Forms: Who Can File And Who Cannot?
ITR-1 (Sahaj): For Salaried Individuals With Income Up To ₹50 Lakh
ITR-1, also known as Sahaj, is meant for resident individuals whose total income does not exceed Rs 50 lakh during the financial year. It can be used by taxpayers earning income from salary, pension, one house property, agricultural income up to Rs 5,000, and specified income from other sources such as savings account interest, fixed deposit interest, and family pension.
The form also covers long-term capital gains under Section 112A up to Rs 1.25 lakh and certain clubbed income of a spouse or minor child.
Who cannot file ITR-1?
ITR-1 cannot be used by non-residents, RNORs, individuals with income above Rs 50 lakh, those earning business or professional income, taxpayers owning more than one house property, company directors, investors in unlisted equity shares, or individuals earning income from lotteries, racehorses, or gambling activities.
Individuals with agricultural income above Rs 5,000, with taxable capital gains or LTCG under Section 112A exceeding Rs 1.25 lakh and those covered under Section 194N or with deferred tax on ESOPs from eligible start-ups are also not eligible for ITR-1.
ITR-2: For Individuals With Capital Gains, Foreign Assets, Or Multiple Properties
This form is applicable to individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession but earn income from salary, pension, foreign assets, house property, capital gains, or other sources.
The form is also suitable for taxpayers with total income exceeding Rs 50 lakh, those owning more than one house property, individuals with foreign assets or foreign income, NRIs, RNORs, individuals with clubbed income of a spouse or minor child and partners in partnership firms receiving interest, salary, commission, bonus, or remuneration without earning business income directly.
Who Cannot File ITR-2?
Taxpayers earning profits and gains from business or professional activities are not eligible to file ITR-2. Partners in a partnership firm who have business income and receive interest, salary, bonus, commission, remuneration or any similar payment from the firm are also not eligible.
ITR-3: For Business Owners And Professionals
ITR-3 is designed for individuals and HUFs who earn income from business or profession. This includes proprietors, freelancers, consultants, and partners in partnership firms receiving salary, commission, bonus, or remuneration from the firm.
The form also applies to taxpayers who have invested in unlisted equity shares during the financial year and those who earn business income alongside salary, pension, capital gains, house property income, or income from other sources.
Who Cannot File ITR – 3?
Companies, charitable trusts, partnership firms, LLPs, AOPs, and BOIs cannot use ITR-3. Similarly, taxpayers eligible for ITR-1, ITR-2, or ITR-4 should not file ITR-3.
ITR-4 (Sugam): For Presumptive Taxation Scheme Taxpayers
ITR-4, popularly known as Sugam, is meant for resident individuals, HUFs, and firms other than LLPs that opt for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE.
The form can be used by taxpayers with total income up to Rs 50 lakh who earn income from salary or pension, own up to two house properties, have agricultural income up to Rs 5,000, and earn specified income from other sources. Long-term capital gains under Section 112A up to Rs 1.25 lakh are also permitted.
Who Cannot File ITR -4?
NRIs, RNORs, individuals with short-term capital gains or long-term capital gains under Section 112A exceeding Rs 1.25 lakh, agricultural income above Rs 5,000 or income from more than two house properties, income taxable at special rates, or investments in unlisted equity shares are not eligible to file ITR-4.
ITR-5: For Firms, LLPs And Similar Entities
ITR-5 is meant for partnership firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and similar entities. Entities required to file ITR-7 cannot use this form.
ITR-6: For Companies
Companies operating in India are generally required to file ITR-6 for income tax returns. However, companies claiming exemption under Section 11 for charitable or religious purposes must file ITR-7 instead.
ITR-7: For Religious Trusts And Exempt Entities
This form is meant for charitable and religious trusts, political parties, educational institutions, hospitals, research associations, business trusts, investment funds, and other entities that are required to file returns under Sections 139(4A) to 139(4F) of the Income Tax Act.
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