What Are the Different Types of ITR Forms and Which One Should You Use?

Filing your Income Tax Return (ITR) is a crucial annual responsibility for every taxpayer in India. Selecting the correct ITR form is essential to ensure accurate reporting and compliance with the Income Tax Department's guidelines. For FY 2024–25 (AY 2025–26), the Central Board of Direct Taxes (CBDT) has notified seven ITR forms, each catering to different categories of taxpayers based on their income sources, amount, and residential status

This guide will help you understand the various ITR forms and determine which one is appropriate for your situation.

Overview of ITR Forms for FY 2024–25

ITR-1 (Sahaj)

Applicable for:

Resident individuals (excluding Not Ordinarily Resident) with total income up to ₹50 lakh.
Income sources: Salary/pension, one house property, other sources (like interest), and agricultural income up to ₹5,000.

Key Updates:

Now allows reporting of long-term capital gains (LTCG) under Section 112A up to ₹1.25 lakh, provided there are no carry-forward losses.

Not Applicable for:

Individuals with income from business or profession.
Those with more than one house property.
Individuals with foreign income or assets.

ITR-2

Applicable for:

Individuals and Hindu Undivided Families (HUFs) not having income from profits and gains of business or profession.
Those with income from salary/pension, multiple house properties, capital gains, foreign assets/income, and agricultural income exceeding ₹5,000.

Key Updates:

Enhanced disclosure requirements, including detailed asset and liability reporting for individuals with income above ₹50 lakh.

ITR-3

Applicable for:

Individuals and HUFs having income from profits and gains of business or profession.
Partners in firms (excluding LLPs) receiving remuneration, interest, etc. Income Tax Department

Key Updates:

Option to choose between the existing LTCG tax rate of 20% with indexation and a new 12.5% rate without indexation for property sold after July 23, 2024.

ITR-4 (Sugam)

Applicable for:

Resident individuals, HUFs, and firms (other than LLPs) with total income up to ₹50 lakh.
Those opting for presumptive income schemes under Sections 44AD, 44ADA, or 44AE.

Key Updates:

Now permits reporting of LTCG under Section 112A up to ₹1.25 lakh without carry-forward losses.
Increased turnover thresholds for presumptive taxation: up to ₹3 crore for businesses and ₹75 lakh for professionals, provided 95% of transactions are digital.

Not Applicable for:

Individuals with income from more than one house property.
Those with foreign income or assets.

ITR-5

Applicable for:

Partnership firms (including LLPs), Association of Persons (AOP), Body of Individuals (BOI), and other similar entities.

Not Applicable for:

Individuals, HUFs, and companies.

ITR-6

Applicable for:

Companies other than those claiming exemption under Section 11 (income from property held for charitable or religious purposes).

Filing Mode:

Mandatory electronic filing.

ITR-7

Applicable for:

Persons including companies required to furnish returns under Sections 139(4A) to 139(4F), such as trusts, political parties, research associations, and news agencies.

Choosing the Right ITR Form

Here’s a simplified guide to help you select the appropriate ITR form:

Income/Category	ITR Form
Salary/pension income up to ₹50 lakh with one house property and LTCG under ₹1.25 lakh	ITR-1
Income from salary/pension exceeding ₹50 lakh, multiple house properties, or capital gains	ITR-2
Income from business or profession	ITR-3
Presumptive income from business/profession under Sections 44AD, 44ADA, or 44AE	ITR-4
Partnership firms, LLPs, AOPs, BOIs	ITR-5
Companies not claiming exemption under Section 11	ITR-6
Trusts, political parties, and other specified entities	ITR-7

Consequences of Filing the Wrong ITR Form

Filing an incorrect ITR form can lead to:

The return being treated as defective under Section 139(9).
Delays in processing and receiving refunds.
Potential penalties and legal complications.

Final Thoughts

Selecting the correct ITR form is vital for accurate tax filing and compliance. The updates for FY 2024–25 aim to simplify the process and accommodate a broader range of taxpayers within the simplified forms. Always ensure you meet the eligibility criteria for the chosen form and consult a tax professional if in doubt. For more detailed information and to download the latest ITR forms, visit the Income Tax Department’s official website.

Note: The information provided is based on the latest available data as of May 2025. Tax laws are subject to change, and it’s advisable to consult the official guidelines or a tax professional for personalized advice.