Types of ITR Forms: Which One Should You Choose?

Filing your Income Tax Return (ITR) is a crucial annual task for every taxpayer in India. But when you log on to the Income Tax e-filing portal, the very first question you’ll face is—“Which ITR form should I select?” With several types of ITR forms available, choosing the right one can seem confusing, especially for first-time filers.

In this guide, we break down the types of ITR forms, who they are meant for, and how to select the right form based on your income type, residential status, and other criteria.

What is an ITR Form?

An Income Tax Return (ITR) form is a prescribed format in which a taxpayer files details of their income, deductions, exemptions, and taxes paid during the financial year with the Income Tax Department of India.

The Central Board of Direct Taxes (CBDT) has notified seven types of ITR forms—from ITR-1 to ITR-7—each meant for a specific category of taxpayers and income sources.

Filing the wrong form can lead to processing delays or even rejection of your return. So, choosing the correct ITR form is critical.

Overview of ITR Forms and Their Applicability

Here's a breakdown of the various ITR forms and who should use them:

1. ITR-1 (Sahaj)

For: Resident individuals (not HUF) with simple income sources

✅ Applicable if:

• You are a resident individual (not HUF)
• Your total income is up to ₹50 lakh
• You have income from:
• Salary or pension
• One house property (not on rent or jointly owned)
• Other sources (interest, dividends, etc.)
• Agricultural income (up to ₹5,000)

❌ Not for:

• Individuals with capital gains
• Income from business or profession
• Owning more than one house property
• Directors of companies or holders of unlisted equity shares

Best for: Salaried employees with straightforward income.

2. ITR-2

For: Individuals and HUFs with income from multiple sources but no business income

✅ Applicable if:

• You are an individual or HUF
• Your income is from:
• Salary or pension
• More than one house property
• Capital gains (sale of property, shares, etc.)
• Foreign assets or foreign income
• Agricultural income above ₹5,000
• You are a director in a company or hold unlisted equity shares

❌ Not for:

• Individuals with income from business or profession

Best for: Individuals with capital gains or foreign income.

3. ITR-3

For: Individuals and HUFs with income from business or profession

✅ Applicable if:

• You are an individual or HUF
• Your income includes:
• Business or professional income (e.g., freelancers, consultants, shop owners)
• Salary/pension
• House property
• Capital gains
• Other sources
• You are a partner in a firm (but not filing on behalf of the firm)

Best for: Professionals, sole proprietors, or partners in firms.

4. ITR-4 (Sugam)

For: Individuals, HUFs, and firms (other than LLPs) under presumptive income scheme

✅ Applicable if:

• Your income is under the presumptive taxation scheme under:
• Section 44AD (small businesses)
• Section 44ADA (professionals)
• Section 44AE (transporters)
• Your total income is up to ₹50 lakh
• You have income from:
• Salary or pension
• One house property
• Other sources (excluding lottery, racehorses)

❌ Not for:

• Individuals with capital gains
• Income from more than one house property
• Directors or those with foreign assets

Best for: Small business owners, freelancers, or professionals using presumptive taxation.

5. ITR-5

For: Firms, LLPs, AOPs, BOIs, estates, etc.

✅ Applicable if you are:

• A partnership firm
• LLP (Limited Liability Partnership)
• Association of Persons (AOP)
• Body of Individuals (BOI)
• Estate of deceased or insolvent
• Business trust or investment fund

Not for: Individuals, HUFs, companies

Best for: Non-individual entities other than companies.

6. ITR-6

For: Companies (except those claiming exemption under Section 11)

✅ Applicable if:

• You are a company registered under the Companies Act
• Not claiming exemption under Section 11 (applicable to trusts and charitable institutions)

Must be filed electronically only.

Best for: Private limited companies, public companies.

7. ITR-7

For: Trusts, political parties, and institutions claiming tax exemption

✅ Applicable if you are:

• Required to file return under Sections 139(4A to 4F):
• 139(4A): Charitable/religious trusts
• 139(4B): Political parties
• 139(4C): Institutions like research associations, news agencies
• 139(4D): Colleges/universities (not required to furnish income/loss under other heads)

Best for: Charitable institutions, political parties, research organizations.

How to Choose the Right ITR Form

To select the correct ITR form, consider the following:

1. What type of income do you earn? (Salary, business, capital gains, foreign income, etc.)
2. What is your residential status? (Resident, NRI, etc.)
3. Are you using presumptive taxation?
4. Do you own foreign assets or unlisted shares?
5. Are you filing on behalf of a firm, company, or trust?

Consequences of Choosing the Wrong ITR Form

Filing your return in the wrong ITR form can lead to:

• Rejection of your return
• Delays in refund processing
• Notice from the Income Tax Department
• Potential penalties or re-filing requirements

Always double-check your eligibility or consult a tax expert before filing.

Filing Mode for ITR Forms

ITR Form	Online (via portal)	Offline (utility upload)
ITR-1 & ITR-4	Yes (for individuals)	Yes
ITR-2, 3, 5, 6, 7	No	Yes (Excel/Java/JSON utilities)

Note: Super senior citizens (age 80+) can file some forms offline (paper mode).

Conclusion

Filing the correct ITR form is the first step toward hassle-free and compliant income tax return submission. Whether you are a salaried employee, freelancer, property owner, businessperson, or trust manager, there is an ITR form that fits your income type.

Don’t rush through the selection—know your category, understand your income, and choose wisely. If unsure, take professional advice or use the income tax department’s built-in help tools.