Choosing a form

Which ITR do I file?

Pick the form that covers everything you earned. If any single item pushes you out of a form, you move up — a salaried person with one share sale files ITR-2, not ITR-1.

You have ITR-1 ITR-2 ITR-3 ITR-4
Salary or own pension Yes Yes Yes Yes
More than one house property No Yes Yes No
Capital gains Only LTCG u/s 112A up to Rs 1,25,000 Yes, all types Yes, all types Only LTCG u/s 112A up to Rs 1,25,000
Business or professional income, books maintained No No Yes No
Presumptive income u/s 44AD, 44ADA, 44AE No No Yes Yes
Partner in a firm No No Yes No
Foreign assets or foreign income No Yes Yes No
Director in a company, or unlisted shares held No Yes Yes No
Agricultural income above Rs 5,000 No Yes Yes No
Total income above Rs 50 lakh No Yes Yes No
Non-resident or RNOR No Yes Yes No
ITR-1 · Sahaj

The straightforward salaried return

For a resident and ordinarily resident individual with total income up to Rs 50 lakh from salary or pension, one house property, and other sources such as interest, dividends and family pension. Long term capital gains u/s 112A are allowed only up to the Rs 1,25,000 exemption.

Not for you if you sold shares beyond that limit, own two houses, hold unlisted shares, or have any business income.

ITR-2

Salary plus investments

Everything ITR-1 covers, plus capital gains of every kind, more than one house property, foreign assets and income, income above Rs 50 lakh, and non-resident status. The one thing it does not carry is business or professional income.

Typical filer a salaried person who also invests in shares, mutual funds or property.

ITR-3

Business and professional books

For proprietors and professionals who maintain regular books of account, partners drawing remuneration or interest from a firm, and anyone reporting speculative or futures and options trading. Carries a full profit and loss account, balance sheet, depreciation schedule and audit particulars.

Typical filer a consultant, trader, or shop owner not using a presumptive scheme.

ITR-4 · Sugam

Presumptive income

For residents declaring profits on a presumptive basis: 8% or 6% of turnover u/s 44AD, 50% of gross receipts u/s 44ADA for professionals, or per-vehicle income u/s 44AE for goods carriages. Total income must stay at or below Rs 50 lakh.

Watch out once you opt out of 44AD you are locked out of it for the next five years.

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