Which ITR Form Should You File for FY 2024-25?

TL;DR

ITR-1 (Sahaj) for salaried individuals with simple income up to ₹50 lakh.

Choosing the right ITR form is the first — and most common — mistake in income tax filing. The wrong form is treated as a defective return under Section 139(9). The assessing officer issues a notice asking you to file a corrected return in the correct form. The corrected return must be filed within 15 days (extendable). If you don’t file a corrected return, the original return is treated as invalid — as if you never filed. This post is the practical guide to picking the right form for FY 2024-25 (AY 2025-26).

The Seven Forms in Use

Form	Purpose	Who Files
ITR-1 (Sahaj)	Simple salary / house property / other sources income	Resident individuals, total income ≤ ₹50 lakh
ITR-2	Individuals / HUFs without business income, but with capital gains, multiple houses, or foreign income	Resident / non-resident individuals / HUFs
ITR-3	Individuals / HUFs with business or professional income	All individuals / HUFs with business income
ITR-4 (Sugam)	Presumptive taxation under Section 44AD, 44ADA, or 44AE	Individuals / HUFs / partnerships (other than LLP) opting for presumptive
ITR-5	Non-company assessees (firms, LLPs, AOPs, BOIs, trusts)	Firms, LLPs, AOPs, BOIs, trusts (not individuals or companies)
ITR-6	Companies	All companies except those claiming Section 11 exemption
ITR-7	Trusts, NGOs, and institutions claiming Section 11 exemption	Trusts, NGOs, political parties

The most common taxpayer files ITR-1, ITR-2, ITR-3, or ITR-4. ITR-5 to ITR-7 are for non-individual entities.

ITR-1 (Sahaj) — The Most-Used Form

ITR-1 is for resident individuals with the following income sources only:

• Salary / pension.
• One house property (self-occupied or let-out).
• Other sources — interest, dividends, family pension.
• Agricultural income up to ₹5,000.

ITR-1 is not for:

• Non-resident individuals.
• Resident individuals with capital gains.
• Resident individuals with business income.
• Resident individuals with more than one house property.
• Resident individuals with foreign income or foreign assets.
• Resident individuals with total income exceeding ₹50 lakh.
• Resident individuals claiming loss under any head.
• Resident individuals with directorship in a company.
• Resident individuals holding unlisted equity shares.

If you have any one of these, you cannot use ITR-1 — you must use ITR-2 (or ITR-3 if you have business income).

For FY 2024-25 (AY 2025-26), ITR-1 has been expanded to include individuals with total income up to ₹50 lakh, including those who opted for the new tax regime under Section 115BAC. The form accommodates the rebate under Section 87A.

ITR-2 — For Capital Gains, Foreign Income, Multiple Houses

ITR-2 is for individuals and HUFs who do not have business income but have:

• Capital gains (STCG or LTCG on equity, property, gold, mutual funds).
• More than one house property.
• Foreign income (NRI returning resident, dividend from a foreign company, interest in a foreign bank account).
• Foreign assets (specified foreign financial assets under Section 139(1)(f) for resident individuals holding any foreign asset, with reporting also required where the aggregate value of foreign assets exceeds ₹50 lakh under the relevant rule).
• Director or shareholder of a company (including an unlisted company) — even if no salary is drawn from the company.

ITR-2 is also for non-resident individuals.

ITR-2 is not for:

• Individuals with business income (use ITR-3).

ITR-3 — For Business and Professional Income

ITR-3 is for individuals and HUFs with business or professional income, regardless of turnover. The form requires:

• Profit and Loss Account.
• Balance Sheet (where the books of accounts are required to be audited under Section 44AB — generally for businesses with turnover above the prescribed threshold of ₹1 crore (or ₹10 crore where at least 95% of transactions are digital), and for professions with gross receipts above ₹50 lakh (or ₹60 lakh where at least 95% of transactions are digital), in the preceding FY).
• Schedule of depreciation.
• Schedule of bad debts.
• Schedule of expenses disallowed under Section 40, 40A, 43B.
• Trading account (if you are a trader / manufacturer).

ITR-3 is also for individuals who are partners in a partnership firm (the share of income from the firm is shown in ITR-3 even if the firm is otherwise assessed separately).

For a taxpayer with both business income and capital gains, ITR-3 is the right form. If you file ITR-2 in this scenario, the return is defective — the department will issue a notice under Section 139(9).

ITR-4 (Sugam) — Presumptive Taxation

ITR-4 is for individuals, HUFs, and partnership firms (other than LLPs) who opt for presumptive taxation under:

• Section 44AD — businesses with aggregate turnover up to ₹3 crore (where cash receipts are up to 5% of total turnover; the threshold reduces to ₹2 crore if cash receipts exceed 5% of total turnover). The presumptive rate is 8% of cash turnover, 6% of digital / bank turnover.
• Section 44ADA — specified professionals with gross receipts up to ₹75 lakh. The presumptive rate is 50% of gross receipts.
• Section 44AE — transporters, goods-carriage operators with not more than 10 goods carriages. The presumptive rate is ₹1,000 per tonne of gross vehicle weight per month for heavy goods vehicles, ₹7,000 per month per vehicle for other than heavy goods vehicles.

ITR-4 is a much-simpler form — no P&L, no Balance Sheet, no depreciation schedule. The taxpayer declares the presumptive income and the tax is computed on it.

ITR-4 is not for:

• Companies or LLPs.
• Individuals who have opted out of presumptive taxation.
• Individuals who have business loss to carry forward.

The Choosing Framework

Step 1 — Are you an individual / HUF or an entity?

Taxpayer	Form
Individual, resident, simple income ≤ ₹50 lakh	ITR-1
Individual, resident, capital gains or multiple houses or foreign income	ITR-2
Individual, resident, business income	ITR-3 (or ITR-4 if presumptive)
Individual, non-resident	ITR-2 (or ITR-3 if business income)
HUF	ITR-2 (or ITR-3 if business income)
Partnership firm	ITR-5
LLP	ITR-5
Company	ITR-6
Trust / NGO	ITR-7

Step 2 — Is your total income ≤ ₹50 lakh?

If yes, ITR-1 is a possibility — but only if you don’t have any of the ITR-1 exclusions listed above.

If no, you must use ITR-2 (no business) or ITR-3 (with business) or ITR-4 (presumptive with income within the presumptive thresholds).

Step 3 — Do you have business or professional income?

If yes, you must use ITR-3 (or ITR-4 if you opt for presumptive taxation and your income is within the threshold).

If no, you must use ITR-1 or ITR-2 depending on the other conditions.

Step 4 — Are you opting for presumptive taxation?

If yes and the income is within the presumptive threshold, ITR-4 is allowed. If you opt out of presumptive taxation, you must use ITR-3.

Step 5 — Are you a director / shareholder of a company (especially unlisted)?

If yes, you cannot use ITR-1. You must use ITR-2 (no business income from the company) or ITR-3 (with salary / director remuneration from the company).

The most common error is using ITR-1 when you are a director of a private limited company — the form rejects this combination on validation.

The Defective Return Process

If you file the wrong form, the department issues a notice under Section 139(9) — the “intimation of defect”. The notice is visible on the e-filing portal under Notices / Orders → Demand / Intimation. The taxpayer is asked to file a corrected return within 15 days (or such further period as the assessing officer may allow).

The common defects:

Defect	Correct Form
Filed ITR-1 with capital gains	File ITR-2
Filed ITR-2 with business income	File ITR-3
Filed ITR-4 without opting for presumptive	File ITR-3
Filed ITR-1 with total income > ₹50 lakh	File ITR-2 or ITR-3
Filed ITR-1 as non-resident	File ITR-2
Filed ITR-1 with more than one house property	File ITR-2
Filed ITR-1 with foreign income / assets	File ITR-2

Practical Examples

Example 1 — Salaried employee with one house

A salaried employee with ₹12 lakh salary, one self-occupied house (interest on home loan ₹2 lakh), and ₹80,000 in bank interest. Total income ₹9.8 lakh. ITR-1.

Example 2 — Salaried employee with capital gains

A salaried employee with ₹15 lakh salary, ₹3 lakh LTCG from sale of listed equity shares, and ₹1 lakh in bank interest. Total income ₹19 lakh. ITR-2 (because of capital gains).

Example 3 — Small business owner

A retailer with ₹40 lakh turnover (cash + digital), opts for presumptive under Section 44AD. ITR-4.

Example 4 — Freelance consultant

A freelance consultant with ₹60 lakh professional receipts, opts for presumptive under Section 44ADA. ITR-4.

Example 5 — Freelance consultant not opting for presumptive

A freelance consultant with ₹60 lakh receipts, opts out of presumptive, maintains books and declares ₹30 lakh net business income. ITR-3 (with P&L and Balance Sheet).

Example 6 — Director of a private limited company

A working director with ₹25 lakh salary from the company, ₹5 lakh consulting income, and ₹2 lakh capital gains from sale of property. Total income ₹32 lakh. ITR-3 (because of business income / salary from the company).

When to Get Help

If your income includes multiple heads (salary + business + capital gains + house property), the ITR form selection is non-trivial. We routinely handle ITR-1 to ITR-4 selection for individuals and HUFs. Our ITR filing service covers the choice, the preparation, the e-verification, and the processing. Share your income summary on WhatsApp for a no-charge assessment.

For the PAN-Aadhaar link requirement, see our PAN-Aadhaar link guide. For the underlying tax regime choice (old vs new), see our old vs new tax regime guide.

Sources

• Income Tax Department — e-Filing Portal
• CBDT — ITR forms for AY 2025-26