Which ITR Form to File? ITR-1 to ITR-4 Explained (2026 Guide)
Last updated: 13 October 2026
Quick answer: Which ITR form to file depends on your income sources. For FY 2025-26, use ITR-1 if you are a resident earning up to ₹50 lakh from salary, up to two houses, interest and equity LTCG up to ₹1.25 lakh. Use ITR-2 for any other capital gains, foreign assets or NRI status; ITR-3 for business income including F&O; ITR-4 for presumptive business income up to ₹50 lakh.
Last updated: 13 October 2026 Quick answer: Which ITR form to file depends on your income sources. For FY 2025-26, use ITR-1 if you are a resident earning up to ₹50 lakh from salary, up to two houses, interest and equity LTCG up to ₹1.25 lakh. Use ITR-2 for any other capital gains, foreign assets or NRI status; ITR-3 for business income including F&O; ITR-4 for presumptive business income up to ₹50 lakh. Key takeaways Which law: returns for FY 2025-26 (AY 2026-27), even if filed now, follow the Income-tax Act, 1961. ITR-1 relaxation: LTCG under section 112A up to ₹1.25 lakh can be reported in ITR-1 and ITR-4, if there are no losses to carry forward. Tripwires: any short-term gain, foreign RSU, directorship or unlisted share means ITR-2 or ITR-3. Missed the deadline? A belated return can be filed until 31 December 2026, with a ₹1,000 or ₹5,000 fee. Next year: new ITR forms under the Income-tax Rules, 2026 will apply for tax year 2026-27, filed from mid-2027. Every October, a wave of income tax notices reaches people who did everything right except one thing: they filed the wrong form. A salaried professional who redeemed a mutual fund held for ten months, or who holds US RSUs from an employer, often files ITR-1 because it is the shortest form. The return is then treated as defective, or the income goes unreported. This guide explains which ITR form to file for FY 2025-26, the year whose returns are being filed in 2026. It covers each form's eligibility, the common traps that push you into a longer form, deadlines (including what to do if you missed 31 July), and what changes once returns move to the Income-tax Act, 2025. Which tax law applies to the return you file in 2026? The Income-tax Act, 2025 came into force on 1 April 2026 and replaced "previous year" and "assessment year" with a single "tax year". That does not change the return you file this year. The CBDT's transition FAQs state that the return for FY 2025-26 (AY 2026-27) is governed entirely by the 1961 Act, even when filed after 1 April 2026. So for this filing season, you still use ITR-1 to ITR-7 notified under the 1961 Act, select AY 2026-27 on the e-filing portal, and cite familiar sections such as 80C, 112A and 139. The first return under the new Act, for tax year 2026-27, will be due from July 2027 under section 263, using new forms to be notified under the Income-tax Rules, 2026. How to choose the right ITR form An ITR form is the prescribed return format that matches the type of income you have and your residential status. Choosing it comes down to four questions, in this order. Decision path for which ITR form to file for FY 2025-26 The e-filing portal also has a "Help me decide" feature that asks similar questions. Use it as a check, not a substitute: it relies on what you tell it, and the classic mistakes come from not realising that a particular transaction counts as capital gains or foreign income. Who can file ITR-1 (Sahaj) for AY 2026-27? ITR-1 is the simplest return. According to the Income Tax Department's e-filing portal, you can use it for AY 2026-27 if you are a resident and ordinarily resident individual with total income up to ₹50 lakh from: Salary or pension. House property: the department's ITR-1 FAQ says income from up to two house properties can be reported for AY 2026-27. Other sources such as savings and FD interest, dividends and family pension. Agricultural income up to ₹5,000. Long-term capital gains under section 112A up to ₹1.25 lakh , from listed equity shares or equity mutual funds, provided you have no brought-forward or carried-forward capital loss. You cannot use ITR-1 if you are a company director, held unlisted equity shares at any time in the year, have foreign assets or foreign income, have any short-term capital gain, have LTCG under 112A above ₹1.25 lakh, had TDS under section 194N (large cash withdrawals), deferred tax on startup ESOPs, or have losses to carry forward. The ₹1.25 lakh LTCG relaxation, explained This is the change most salaried investors care about. If you sold equity funds or shares held for more than 12 months and your total gain was within ₹1.25 lakh, that gain is fully exempt and you can still stay in ITR-1. Once it crosses ₹1.25 lakh, or if you have even a small short-term gain from a fund held under 12 months, you need ITR-2. Our guide to capital gains tax on mutual funds (/insights/capital-gains-tax-mutual-funds-2026) shows how to read your capital gains statement to check this. When do you need ITR-2? ITR-2 is for individuals and HUFs who have no income from business or profession but do not qualify for ITR-1. The common triggers for salaried and retired investors are: Capital gains of any kind beyond the ITR-1 limit: STCG on funds or shares, LTCG above ₹1.25 lakh, sale of property, gold, debt funds or unlisted shares. Foreign assets or income: US stocks, foreign bank accounts or RSUs and ESPP shares of a foreign parent. These need Schedule FA, explained in our Schedule FA guide (/insights/foreign-assets-schedule-fa-india) and our article on ESOP and RSU taxation (/insights/esop-rsu-taxation-india) . Residential status: NRIs and "resident but not ordinarily resident" (RNOR) taxpayers cannot use ITR-1. See NRI taxation in India (/insights/nri-taxation-india-guide) . Income above ₹50 lakh , directorship in a company, or unlisted equity holdings. Losses to carry forward , for example a capital loss you want to set off in future years. Who should file ITR-3 and ITR-4? ITR-3 is for individuals and HUFs with income from business or profession that is not computed on a presumptive basis. This includes futures and options and intraday traders (F&O is treated as non-speculative business income, intraday equity as speculative), consultants who maintain books, and partners in a firm. ITR-3 can also report salary, house property and capital gains, so a salaried person who trades F&O files ITR-3, not ITR-2. Read tax on F&O and intraday trading (/insights/tax-on-fno-intraday-trading) before filing. ITR-4 (Sugam) is for resident individuals, HUFs and firms (other than LLPs) with total income up to ₹50 lakh who declare business or professional income on a presumptive basis under sections 44AD, 44ADA or 44AE. Under 44AD a small business declares 6% (digital receipts) or 8% of turnover as profit; under 44ADA a professional declares 50% of gross receipts. These schemes have turnover limits (₹3 crore and ₹75 lakh respectively where cash receipts are within 5%, otherwise ₹2 crore and ₹50 lakh). The portal notes that ITR-4 is optional: an eligible taxpayer may file ITR-3 instead. Freelancers and consultants should also check the regime rule: a taxpayer with business income who wants the old regime must file Form 10-IEA by the due date, and can switch back only once. See our guide on money management for freelancers (/insights/money-management-for-freelancers-and-self-employed) . Comparison of ITR-1, ITR-2, ITR-3 and ITR-4 eligibility Which ITR form fits your situation? Your situation (FY 2025-26) Form Why Salary + FD interest, no investments sold ITR-1 Simple income, under ₹50 lakh Salary + equity fund LTCG of ₹90,000, no STCG ITR-1 112A gain within ₹1.25 lakh Salary + equity fund LTCG of ₹1.6 lakh ITR-2 112A gain above ₹1.25 lakh Salary + debt fund or gold ETF redemption ITR-2 Capital gains outside 112A IT employee with US-listed RSUs ITR-2 Foreign assets, Schedule FA Salary + F&O trades (even a loss) ITR-3 Business income Freelance designer, ₹40 lakh receipts, presumptive ITR-4 Section 44ADA, income under ₹50 lakh Retiree with pension, SCSS interest and a flat sale ITR-2 Capital gains on property NRI with rent and FD interest in India ITR-2 Non-residents cannot use ITR-1 What are the ITR due dates for FY 2025-26? For AY 2026-27, the due dates under section 139(1) are 31 July 2026 for salaried and other non-business taxpayers, 31 August 2026 for business and professional taxpayers whose accounts need no audit (a Budget 2026 change, earlier 31 July), 31 October 2026 for audit cases and 30 November 2026 for transfer-pricing cases. ITR filing due dates for AY 2026-27 including belated and revised returns Missed the deadline? File a belated return by 31 December 2026 If you have not yet filed, a belated return under section 139(4) is allowed until 31 December 2026 or before the assessment is completed, whichever is earlier. The late fee under section 234F is ₹1,000 if total income is up to ₹5 lakh and ₹5,000 otherwise, plus 1% a month interest under section 234A on any tax still unpaid. A belated filer also cannot carry forward most losses, such as capital or business losses. Late fee for belated ITR filing under section 234F If you filed on the wrong form or missed income, a revised return under section 139(5) is now allowed up to 31 March 2027 for AY 2026-27, a 12-month window introduced in Budget 2026; a fee applies if you revise after the original nine-month window. After that, an updated return (ITR-U) under section 139(8A) is possible within 48 months, with additional tax. If a notice has already arrived, read what each type of income tax notice means (/insights/income-tax-notice-types-how-to-respond) . Special cases: senior citizens and pensioners Super senior citizens (80+) may file ITR-1 or ITR-4 on paper, though e-filing remains available. Seniors aged 75+ whose only income is pension and interest from the same specified bank can give a declaration to that bank (Form 12BBA under the old rules; Form 125 from tax year 2026-27). The bank deducts the tax and no return is needed. Seniors with capital gains from mutual fund SWPs or a property sale need ITR-2. Our guide to senior citizen tax planning (/insights/senior-citizen-tax-planning-interest-pension-rent) covers the rest. What changes from tax year 2026-27? Income earned from 1 April 2026 falls under the Income-tax Act, 2025. The CBDT has said new return forms will be notified under the Income-tax Rules, 2026 before the due dates, and the e-filing portal will host them. Several familiar forms have already been renumbered: Form 16 becomes Form 130, Form 26AS becomes Form 168, Form 12BB becomes Form 124, and Forms 15G/15H merge into Form 121. The due-date structure is retained (31 July, 31 August, 31 October and 30 November), so the first new-Act returns will be due from July 2027. Until those forms are notified, it is safest not to assume that today's ITR-1 limits will carry over unchanged. Meanwhile, plan the current year with advance tax for investors (/insights/advance-tax-for-investors) in mind, and check whether the expanded HRA metro list (/insights/hra-exemption-calculation) affects your regime choice. Five filing mistakes to avoid Ignoring small capital gains. A ₹3,000 STCG from a fund switch still needs ITR-2. Skipping Schedule FA. Foreign RSUs must be reported even if not sold; penalties under the Black Money Act can be steep. Filing ITR-2 with F&O trades. F&O is business income and needs ITR-3. Not matching AIS. Check the Annual Information Statement and Form 26AS before filing; mismatches trigger notices. Not e-verifying. A return is not complete until verified, normally within 30 days of filing. Related reading The New Income-tax Act 2025: What Changed for Individuals (/insights/income-tax-act-2025-changes-individuals) Capital Gains Tax on Shares and Tax Harvesting (/insights/capital-gains-tax-shares-tax-harvesting) Foreign Assets in Your Tax Return: Schedule FA (/insights/foreign-assets-schedule-fa-india) Tax Consultation in India: ITR, Capital Gains, GST (/insights/tax-consultation-services-india) Advance Tax for Investors and Retirees (/insights/advance-tax-for-investors) Frequently Asked Questions Can I file ITR-1 if I have capital gains from mutual funds? Only if all your gains are long-term gains under section 112A (equity funds or listed shares held over 12 months) totalling no more than ₹1.25 lakh, and you have no losses to carry forward. Any short-term gain, or gains on debt funds, gold or property, requires ITR-2 (or ITR-3 if you also have business income). Which ITR should a salaried person with F&O trading file? ITR-3. Futures and options income is treated as non-speculative business income, even if you made a loss and even if trading is not your main job. ITR-3 lets you report salary, capital gains and business income together. Check whether a tax audit applies, based on turnover and declared profit. Can an NRI file ITR-1? No. ITR-1 and ITR-4 are only for residents who are ordinarily resident. NRIs and RNORs with salary, rent, interest or capital gains in India file ITR-2, or ITR-3 if they have business income in India. What happens if I file the wrong ITR form? The department may issue a defective return notice under section 139(9), asking you to correct it within the time allowed, usually 15 days. If you do not respond, the return can be treated as invalid. You can avoid this by filing a revised return on the correct form, which for AY 2026-27 is allowed until 31 March 2027. Can I still file my return for FY 2025-26 in October 2026? Yes. A belated return can be filed until 31 December 2026, with a late fee of ₹1,000 (income up to ₹5 lakh) or ₹5,000, plus interest on unpaid tax. Most losses cannot be carried forward from a belated return, so file as early as possible. Do I need to file a return if my income is below the taxable limit? Generally not, but filing is mandatory in certain cases, for example if you hold foreign assets, deposited large sums in current accounts, or spent heavily on foreign travel or electricity as notified. Filing a nil return also helps when claiming a TDS refund and when applying for loans or visas. Will ITR-1 limits stay the same under the new Income-tax Act? Not confirmed yet. The CBDT has said new ITR forms for tax year 2026-27 will be notified under the Income-tax Rules, 2026 before the 2027 due dates. Until then, assume nothing and check the eligibility conditions when the forms are released. Sources: e-Filing portal, returns applicable to salaried individuals (https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1) ; e-Filing portal, ITR-1 FAQs (https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/ITR1-FAQ) ; e-Filing portal, business and profession (https://www.incometax.gov.in/iec/foportal/help/individual-business-profession) ; e-Filing portal, senior citizens (https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-2) ; CBDT FAQs on transition to the Income-tax Act, 2025 (https://www.incometaxindia.gov.in/documents/81799/11848482/Updated-FQAs-on-Interplay%26Transitions.pdf/e10ad2b6-9495-de90-58d3-20606d8954ae?t=1775128640970) ; KPMG, Union Budget 2026-27 highlights (https://assets.kpmg.com/content/dam/kpmgsites/in/pdf/2026/02/India-Union-Budget-highlights-2026-27.pdf) ; ClearTax, new income tax forms (https://cleartax.in/s/new-income-tax-forms) . Worked examples are Money n Wealth illustrations. Not sure which form your income needs? RSUs, F&O trades and SWP redemptions are where most filing errors happen. Talk to Money n Wealth (/contact) for a free portfolio review and help with your return through our tax consultation service (/products/tax) . This article is for general educational purposes only and does not constitute financial advice. Figures and examples are illustrative. Please consult a qualified financial adviser for guidance specific to your situation. Money n Wealth (Predics Fintech Services Pvt Ltd) is an AMFI-registered Mutual Fund Distributor (ARN-121995) and APMI-registered PMS Distributor (APRN07444); it is not a SEBI-registered investment adviser and may earn distribution commission on investments made through it.
Frequently Asked Questions
Can I file ITR-1 if I have capital gains from mutual funds?
Only if all your gains are long-term gains under section 112A (equity funds or listed shares held over 12 months) totalling no more than ₹1.25 lakh, and you have no losses to carry forward. Any short-term gain, or gains on debt funds, gold or property, requires ITR-2 (or ITR-3 if you also have business income).
Which ITR should a salaried person with F&O trading file?
ITR-3. Futures and options income is treated as non-speculative business income, even if you made a loss and even if trading is not your main job. ITR-3 lets you report salary, capital gains and business income together. Check whether a tax audit applies, based on turnover and declared profit.
Can an NRI file ITR-1?
No. ITR-1 and ITR-4 are only for residents who are ordinarily resident. NRIs and RNORs with salary, rent, interest or capital gains in India file ITR-2, or ITR-3 if they have business income in India.
What happens if I file the wrong ITR form?
The department may issue a defective return notice under section 139(9), asking you to correct it within the time allowed, usually 15 days. If you do not respond, the return can be treated as invalid. You can avoid this by filing a revised return on the correct form, which for AY 2026-27 is allowed until 31 March 2027.
Can I still file my return for FY 2025-26 in October 2026?
Yes. A belated return can be filed until 31 December 2026, with a late fee of ₹1,000 (income up to ₹5 lakh) or ₹5,000, plus interest on unpaid tax. Most losses cannot be carried forward from a belated return, so file as early as possible.
Do I need to file a return if my income is below the taxable limit?
Generally not, but filing is mandatory in certain cases, for example if you hold foreign assets, deposited large sums in current accounts, or spent heavily on foreign travel or electricity as notified. Filing a nil return also helps when claiming a TDS refund and when applying for loans or visas.
Will ITR-1 limits stay the same under the new Income-tax Act?
Not confirmed yet. The CBDT has said new ITR forms for tax year 2026-27 will be notified under the Income-tax Rules, 2026 before the 2027 due dates. Until then, assume nothing and check the eligibility conditions when the forms are released.
Not sure which form your income needs?
RSUs, F&O trades and SWP redemptions are where most filing errors happen. Talk to Money n Wealth for a free portfolio review and help with your return through our tax consultation service .
