ITR-1 Or ITR-3? Which Income Tax Return form you should actually be filing for AY 2026-27

Every year, millions of Indian taxpayers file the wrong income tax return form — not out of dishonesty, but out of genuine confusion about which form their income profile requires. Filing the wrong form can mean a defective return notice, a demand for refiling, or in some cases, penalties for incorrect disclosure. For AY 2026-27, the Income Tax Department has also expanded the eligibility criteria for some forms, meaning taxpayers who previously had to file ITR-2 may now qualify for the simpler ITR-1. Here is a complete guide to all seven ITR forms.

ITR-1 (Sahaj): The Simplest Form, Now With Wider Eligibility

ITR-1, called Sahaj, is designed for resident individual taxpayers with straightforward income. For AY 2026-27, it applies to taxpayers with total income up to Rs 50 lakh from salary or pension, up to two house properties, interest and dividend income, and long-term capital gains under Section 112A of up to Rs 1.25 lakh. Agricultural income up to Rs 5,000 is also permitted. The key change for this year: the Income Tax Department has expanded ITR-1 eligibility to include taxpayers who own two house properties — previously, ownership of more than one property automatically pushed you to ITR-2. ITR-1 cannot be used by directors of companies, those holding unlisted equity shares, NRIs, or taxpayers with income from business or profession.

ITR-2: For Capital Gains, Multiple Properties, And Foreign Income

ITR-2 applies to individuals and Hindu Undivided Families who do not have income from business or profession. It is the correct form if you have capital gains from shares, mutual funds, or property sales; income from more than two house properties; foreign assets or foreign source income; or income that does not fit within ITR-1's limits. NRIs and non-ordinarily resident Indians also use ITR-2 for their Indian-source income. With up to 26 internal schedules, ITR-2 looks complex — but filers only need to complete the schedules that apply to their specific situation. The deadline for ITR-2 is July 31, 2026.

ITR-3: For Business And Profession Income

ITR-3 is filed by individuals and HUFs who earn income through a business or profession — whether it is a sole proprietorship, a trading operation, a consultancy, a medical practice, or any other self-run income-generating activity. Unlike ITR-4, ITR-3 does not limit you to presumptive taxation — it accommodates actual books of accounts, balance sheets, and profit and loss statements. If your business income exceeds the presumptive taxation threshold, or if you have opted out of the presumptive scheme, ITR-3 is your form. Deadline: August 31, 2026 for non-audit cases; October 31 for audit cases.

ITR-4 (Sugam): For Presumptive Taxation

ITR-4, also called Sugam, is designed for individuals, HUFs, and firms other than LLPs who have opted for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE of the Income Tax Act. Under presumptive taxation, eligible taxpayers declare income at a flat percentage of turnover or gross receipts — 8 percent for business income under 44AD, and 50 percent for professional income under 44ADA — without needing to maintain detailed books of accounts. The expanded eligibility for AY 2026-27 allows more taxpayers to qualify for ITR-4. Total income must not exceed Rs 50 lakh. Deadline: August 31, 2026.

ITR-5: For Firms, LLPs, And Associations

ITR-5 is not for individuals at all. It is filed by partnership firms, Limited Liability Partnerships, Associations of Persons, Bodies of Individuals, artificial juridical persons, estates of deceased persons, estates of insolvents, business trusts, and investment funds. Cooperative societies not claiming exemption under Section 11 also use ITR-5. Entities required to file ITR-7 — those claiming exemption under charitable or religious trust provisions — cannot use ITR-5.

ITR-6: For Companies

ITR-6 is exclusively for companies — both private and public — registered under the Companies Act. The single exception: companies that claim exemption under Section 11 of the Income Tax Act, covering income from property held for charitable or religious purposes, must file ITR-7 instead. All other companies, regardless of whether they are profit-making or loss-making, file ITR-6.

ITR-7: For Charitable Trusts, Political Parties, And Research Institutions

ITR-7 applies to any person — including companies — required to file returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act. In practice this means charitable and religious trusts, political parties, research institutions, universities, and entities claiming exemption under Sections 11 and 12. A charitable trust with taxable income above the basic exemption limit that does not need to file under mandatory sections may use ITR-5 — but entities mandatorily required to file under 139(4A) through 139(4F) must use ITR-7.

The Single Most Important Rule

If you are unsure which form applies to you, the safest starting point is this: any business or profession income puts you between ITR-3 and ITR-4. No business income but capital gains, foreign assets, or more than two properties means ITR-2. Income entirely from salary, pension, interest, and modest LTCG within the Rs 1.25 lakh limit — total income under Rs 50 lakh — means ITR-1 is sufficient. The Income Tax Department's e-filing portal at incometax.gov.in has a form selection tool that confirms the right form based on your income sources.