Which ITR form should I file?
ITR-1 covers salary, one house property and modest other income; ITR-2 adds capital gains, a second house and foreign income; ITR-3 is for anyone with business or professional income on regular books; ITR-4 is the presumptive-taxation form for business and professional income under sections 44AD and 44ADA. Filing on the wrong form makes the return defective under section 139(9), which starts a fifteen-day clock most people do not notice until it has run.
बिंदुवार तुलना
| मानदंड | ITR-1Salary and one house. The simple one. | ITR-2Capital gains, more than one house, foreign income. | ITR-3Business or profession on regular books. | ITR-4Presumptive taxation under 44AD or 44ADA. |
|---|---|---|---|---|
| Salary or pension | Yes | Yes | Yes | Yes |
| Total income limit | ₹50 lakh | No limit | No limit | ₹50 lakh |
| House property | One only | Any number | Any number | One only |
| Capital gains | No | Yes | Yes | No |
| Business or professional income | No | No | Yes, on books | Yes, presumptive only |
| Foreign income or foreign assets | No | Yes | Yes | No |
| Director of a company | Not allowed | Yes | Yes | Not allowed |
| Holds unlisted equity shares | Not allowed | Yes | Yes | Not allowed |
| Books of account required | No | No | Yes | No |
| Agricultural income above ₹5,000 | Not allowed | Yes | Yes | Not allowed |
| Available to a non-resident | No | Yes | Yes | No |
| Income from more than one employer | Yes | Yes | Yes | Yes |
| Carry forward of losses | Not permitted | Yes | Yes | Not permitted |
कुछ पंक्तियों पर टिप्पणी
Capital gains. This is the single commonest reason a return filed on ITR-1 is defective — one mutual fund redemption is enough.
Available to a non-resident. ITR-1 and ITR-4 are resident-only. An NRI with a single Indian rental property still files ITR-2.
Income from more than one employer. Permitted on every form, but the returns have to be combined — each employer computed tax as though they were your only one, so the combined return usually shows tax still payable.
सिफ़ारिश
किसे क्या चुनना चाहिए
नीचे स्थिति के अनुसार स्पष्ट उत्तर हैं। जहाँ उत्तर पलटता है, वह भी लिखा है।
यदि
Salaried, one house, bank interest, nothing sold
ITR-1
It is the shortest form and everything you have fits inside it. Check the AIS first — an unnoticed mutual fund redemption moves you to ITR-2.
यदि
You sold shares, mutual fund units or property this year
ITR-2
Any capital gain, however small, puts ITR-1 out of reach. It is also the form for a second house, foreign assets and being a company director.
यदि
Freelancer or consultant with receipts under ₹75 lakh and a healthy margin
ITR-4
Section 44ADA lets you declare 50% of receipts as income and skip detailed books. It only makes sense if your real margin is at or above 50% — below that it costs more tax than proper accounts.
यदि
Business or profession with real expenses and a margin below the presumptive rate
ITR-3
Regular books let you deduct what you actually spent. Presumptive taxation fixes the margin regardless, so a genuinely low-margin business pays tax on profit it never made.
Start from the AIS, not from memory
The commonest way to end up on the wrong form is to file from Form 16 alone and forget a transaction. The Annual Information Statement lists securities sales, property transactions, dividends and interest the department already knows about — and any one of those can move you off ITR-1.
Open the AIS before choosing the form. It takes a minute and it is the single highest-value minute in the whole filing.
What a defective return actually means
A return filed on the wrong form is treated as defective under section 139(9). You get a notice with fifteen days to correct it, and if the correction is not made the return is treated as never filed — which means the filing date is lost, along with the carry-forward of losses and, if the due date has passed, the ability to file on time at all.
The notice arrives by email and on the portal. This is the specific reason to keep the email registered on the portal current.
The four forms in one sentence each
ITR-1, called Sahaj, is for a resident individual with total income up to ₹50 lakh from salary or pension, one house property and other income such as bank interest. It is the shortest return in the system and it is correct for a large share of salaried India.
ITR-2 is ITR-1 plus everything ITR-1 excludes and nothing that involves running a business: capital gains, more than one house, foreign income or assets, being a company director, holding unlisted shares, and agricultural income above ₹5,000.
ITR-3 is for anyone with income from business or profession who is keeping regular books — the full return, with a profit and loss account, a balance sheet and a depreciation schedule inside it.
ITR-4, called Sugam, is the short form for business or professional income declared under presumptive taxation. It is quick precisely because it declares a fixed margin rather than computing one.
Residential status changes the answer entirely
ITR-1 and ITR-4 are available only to a resident. A non-resident, or a resident but not ordinarily resident, cannot use either regardless of how simple their Indian income is — an NRI with a single rental property in India files ITR-2.
Residential status is determined by days present in India under section 6, and it can change in a year of relocation without anyone noticing. A return filed on ITR-1 in the year someone moved abroad is defective for that reason alone, which is a surprisingly common way to receive a 139(9) notice.
Presumptive taxation is a decision, not a form
Choosing ITR-4 means choosing sections 44AD or 44ADA, which declare a fixed percentage of turnover as income — 6% or 8% for business, 50% for a profession. That is a genuinely good deal for a high-margin consultant and a bad one for a low-margin trader.
It also carries a lock: opting out of presumptive taxation after using it triggers a tax audit requirement for the following five years. The form choice and the tax decision are the same decision.
इस निर्णय में आम ग़लतियाँ
- Filing ITR-1 in a year with any capital gain, however small
- Choosing the form from last year's filing without checking what changed
- Filing ITR-1 while holding unlisted shares or serving as a company director, neither of which it permits
- Choosing ITR-4 for the simplicity without checking whether the presumptive margin costs more tax
- Missing the fifteen-day window on a defective return notice