Which ITR form should you file? Guide to types of income tax return forms for FY 2024–25
With the income tax return (ITR) filing season for Financial Year 2024–25 (Assessment Year 2025–26) underway, choosing the correct ITR form has become a critical first step for every taxpayer.
Which ITR form should you file?
With the income tax return (ITR) filing season for Financial Year 2024–25 (Assessment Year 2025–26) underway, choosing the correct ITR form has become a critical first step for every taxpayer. Filing your return using the wrong form can render it invalid or defective and may lead to delays, notices, or even penalties. Tax experts advise individuals, freelancers, businesses, and professionals to carefully review the latest income tax forms before proceeding with their filing.
1. ITR-1 (Sahaj): For Salaried Individuals with Simple Incomes
Who can use it:
- Resident individuals (not HUFs or NRIs)
- Total income up to Rs 50 lakh
- Income from salary/pension, one house property, and other sources (like interest)
Who cannot use it:
- Individuals with capital gains, business income, or foreign assets/income
- Those who are Directors in a company or have invested in unlisted shares
2. ITR-2: For Those with Capital Gains or Foreign Income
Who can use it:
- Individuals and Hindu Undivided Families (HUFs)
- Those with income from salary, more than one house property, capital gains, or foreign income/assets
- NRIs filing returns in India
Who cannot use it:
- Individuals with business or professional income
3. ITR-3: For Professionals, Business Owners and Traders
Who can use it:
- Individuals or HUFs with income from business or profession
- Includes freelancers, consultants, doctors, lawyers, traders, partners in firms, etc.
Key points:
- Must maintain detailed books of accounts if required under law
- Derivatives, intraday, and cryptocurrency traders generally fall under this form
4. ITR-4 (Sugam): For Small Businesses and Presumptive Taxpayers
Who can use it:
- Individuals, HUFs, and firms (other than LLPs)
- Those who opt for presumptive taxation under Sections 44AD, 44ADA, or 44AE
- Turnover must be within prescribed limits (up to Rs 2 crore for businesses, Rs 50 lakh for professionals)
Who cannot use it:
- Those earning income from capital gains, foreign assets, or more than one house property
- If total income exceeds Rs 50 lakh
5. ITR-5: For Firms, LLPs, AOPs, BOIs
Who can use it:
- Partnership firms, LLPs, Association of Persons (AOPs), and Bodies of Individuals (BOIs)
Key points:
- Not for individuals or HUFs
- Requires disclosure of firm’s balance sheet, profit & loss account, and partner details
6. ITR-6: For Companies Other Than Those Claiming Exemption
Who can use it:
- Companies not claiming exemption under Section 11 (like charitable or religious trusts)
Mandatory:
- Electronic filing with digital signature
7. ITR-7: For Trusts, NGOs and Political Parties
Who can use it:
- Entities claiming exemptions under Sections 139(4A), 139(4B), 139(4C), or 139(4D)
- Includes charitable institutions, religious trusts, political parties, research institutions, etc.
Key points:
- Needs income and activity disclosures specific to the organisation’s objectives
8. Choosing the Right Form Is Crucial
Using the incorrect ITR form could lead to:
- Return being marked defective (Section 139(9))
- Rejection or delays in processing and refunds
- Notices from the Income Tax Department
- Penalties under Section 271F for non-compliance
Taxpayers are advised to consult the official Income Tax e-filing portal or seek professional guidance to determine the correct form before submission.
Conclusion
With multiple ITR forms tailored to different taxpayer categories and income sources, choosing the right form is essential to ensure a smooth filing experience. Whether salaried, self-employed, an NRI, or running a business—matching your income type with the appropriate form is the foundation of a compliant and error-free return.
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