ITR Filing

Which ITR Form Should You File in AY 2026-27? ITR-1 to ITR-7 Explained

A plain-language map of ITR-1 to ITR-7 for AY 2026-27, with an eligibility table, the errors that get returns marked defective, and six real-life personas matched to the right form.

Reviewed by CMA Sahil, Cost and Management Accountant Updated 6 Sept 2026 10 min read

Key takeaways

ITR-1 is only for resident individuals with income up to ₹50 lakh from salary, one house property, other sources and small equity LTCG up to ₹1.25 lakh under section 112A.
Any capital gains beyond that, a second house, foreign assets, directorship, unlisted shares or NRI status pushes you to ITR-2.
Business or professional income, including F&O and intraday trading, needs ITR-3, unless you qualify for presumptive taxation and can use ITR-4.
Filing the wrong form invites a defective return notice under section 139(9). You then have 15 days to fix it or the return is treated as invalid.

Forms notified: 7; ITR-1 to ITR-7
ITR-1 and ITR-4 income cap: ₹50 lakh; Total income for the year
Equity LTCG allowed in ITR-1/4: ₹1.25 lakh; Under section 112A, no loss carry forward
Time to fix a defective return: 15 days; From the 139(9) notice

Income Tax CalculatorNot sure whether your income crosses ₹50 lakh once everything is added? Use the income tax calculator to total salary, interest and gains and see the tax under both regimes.

Why the form matters

Each ITR form carries only the schedules needed for a particular income mix. ITR-1 has no capital gains schedule, ITR-2 has no profit and loss account, and ITR-4 assumes you are declaring a fixed percentage of turnover as profit. If your income does not fit the form, the return cannot report it correctly.

The portal now cross-checks the return against AIS. Share sales in AIS with an ITR-1 filing, or F&O turnover in AIS with an ITR-4, are the two most common triggers for a defective return notice.

ITR forms vs eligibility for AY 2026-27

Eligibility as per the AY 2026-27 forms notified by CBDT.
Form	Who can use it	Income types covered	Cannot use if
ITR-1 (Sahaj)	Ordinarily resident individual	Salary or pension, one house property, other sources, agricultural income up to ₹5,000, LTCG u/s 112A up to ₹1.25 lakh	Income above ₹50 lakh, director in a company, unlisted shares, foreign assets or income, TDS u/s 194N, deferred ESOP tax, loss to carry forward, more than one house property
ITR-2	Individual or HUF without business income	Everything in ITR-1 plus any capital gains, multiple house properties, foreign income and assets, lottery winnings, income above ₹50 lakh	Any income from business or profession, including F&O or partner share of profit
ITR-3	Individual or HUF with business or professional income	Everything in ITR-2 plus business or professional income, F&O and intraday, partner in a firm, presumptive income where ITR-4 is not allowed	Not applicable to firms, LLPs or companies
ITR-4 (Sugam)	Resident individual, HUF or partnership firm (not LLP)	Presumptive income u/s 44AD, 44ADA or 44AE, salary or pension, one house property, other sources, LTCG u/s 112A up to ₹1.25 lakh	Income above ₹50 lakh, director, unlisted shares, foreign assets, more than one house property, loss to carry forward
ITR-5	Partnership firms, LLPs, AOPs, BOIs, estates	All heads	Individuals, HUFs, companies, trusts
ITR-6	Companies	All heads	Companies claiming exemption under section 11
ITR-7	Trusts, political parties, universities, research bodies	Income under sections 139(4A) to 139(4D)	Anyone not covered by those sub-sections

ITR-1: the simplest form, with strict boundaries

ITR-1 works for the majority of salaried employees: one or more Form 16s, savings and FD interest, dividends, and possibly one house that is self-occupied or let out. Since AY 2025-26 it also accepts long-term capital gains on listed equity and equity mutual funds under section 112A, provided the total is within ₹1.25 lakh and there is no loss to carry forward or set off.

Two Form 16s from a job change are fine; consolidate the salary and TDS.
Interest from savings, FDs and post office schemes goes under other sources.
Home loan interest on a self-occupied house can be claimed here under the old regime, up to ₹2 lakh under section 24(b).
Any short-term capital gain, even ₹500, pushes you to ITR-2.

ITR-2: investors, property owners and NRIs

ITR-2 is the form for anyone with capital gains beyond the ITR-1 allowance, a second house, foreign assets or income, ESOPs from a foreign parent, or non-resident status. It carries Schedule CG for gains, Schedule FA for foreign assets, Schedule FSI for foreign income and Schedule AL for assets and liabilities when income exceeds ₹1 crore.

Directors and unlisted shareholders

If you were a director in any company at any time during FY 2025-26, or held unlisted equity shares (including in your own private limited company or a startup ESOP that vested), you cannot use ITR-1 or ITR-4 even if your only income is salary.

ITR-3: business, profession and traders

Income from futures and options, intraday equity, commodity or currency trading is treated as business income, so traders file ITR-3 regardless of whether they also earn a salary. ITR-3 includes a profit and loss account, balance sheet, depreciation schedule and the option to declare presumptive income where ITR-4 is not available.

Partners in a firm also use ITR-3 to report their share of profit (exempt) and remuneration or interest (taxable). Consultants whose receipts exceed the 44ADA limit of ₹50 lakh (₹75 lakh if at least 95% of receipts are digital) must maintain books and file ITR-3.

ITR-4: presumptive income for small businesses and professionals

ITR-4 is designed for taxpayers who declare a fixed profit percentage without keeping detailed books: 8% of turnover (6% for digital receipts) under section 44AD for businesses up to ₹2 crore (₹3 crore with 95% digital receipts), 50% of receipts under section 44ADA for professionals up to ₹50 lakh (₹75 lakh with 95% digital receipts), and a per-vehicle amount under 44AE for goods transporters.

Worked example: Freelance developer under 44ADA, ITR-4

Gross professional receipts: ₹22,00,000
Presumptive profit at 50%: ₹11,00,000
Savings interest: ₹18,000
Gross total income: ₹11,18,000
Tax under new regime after 87A rebate (income under ₹12 lakh): ₹0

F&O traders should not use ITR-4 casually

Presumptive 44AD can technically apply to F&O, but it requires declaring at least 6% of turnover as profit. A trader with losses loses the ability to carry them forward, and opting out of 44AD within five years triggers a tax audit requirement. Most traders are better served by ITR-3 with actual profit or loss.

Common mistakes that trigger a defective return

Filing ITR-1 when the broker statement shows any short-term gain, or long-term gain above ₹1.25 lakh.
Using ITR-1 or ITR-4 while being a director or holding unlisted shares, including shares of your own company.
Reporting F&O or intraday activity in ITR-2 as capital gains instead of business income in ITR-3.
Filing ITR-1 as a non-resident. NRIs must use ITR-2 or ITR-3.
Claiming presumptive income in ITR-4 when turnover exceeds the 44AD or 44ADA limit.
Owning two houses and using ITR-1; the second property, even if vacant, requires ITR-2.
Holding US stocks through an app, or a foreign bank account from an overseas stint, and filing ITR-1 without Schedule FA.
Forgetting to report exempt income such as PPF interest and share of partnership profit in Schedule EI.

Done for you

ITR for Salaried

Our plan finder picks the form from your income sources, and a qualified professional (CMA/CA) reviews the draft before filing so a wrong-form notice never reaches you. Salaried ITR from ₹999, capital gains from ₹1,999.

₹999 View plan

Persona examples: match yourself to a form

Taxpayer	Income during FY 2025-26	Correct form	Why
Priya, software engineer in Pune	Salary ₹9.5 lakh, savings interest ₹12,000, one self-occupied flat with home loan	ITR-1	Salary, one house property, other sources, income under ₹50 lakh
Rahul, marketing manager in Gurugram	Salary ₹18 lakh, sold equity mutual funds with LTCG ₹3 lakh and STCG ₹40,000	ITR-2	Capital gains exceed the ITR-1 allowance and include STCG
Amit, salaried and part-time F&O trader	Salary ₹14 lakh, F&O loss ₹2.5 lakh, turnover ₹38 lakh	ITR-3	F&O is business income; ITR-3 allows the loss to be carried forward for 8 years
Neha, freelance graphic designer	Professional receipts ₹22 lakh, all through bank transfers	ITR-4	Presumptive 44ADA at 50%, income below ₹50 lakh, no other disqualification
Sunil, NRI in Dubai	NRO interest ₹3 lakh, rent from a Chandigarh flat ₹4.8 lakh	ITR-2	Non-residents cannot use ITR-1; no business income so ITR-3 is not needed
Meera, director of her own private limited company	Director remuneration ₹15 lakh, holds unlisted shares in the company	ITR-2	Directorship and unlisted shares bar ITR-1 even though the income is salary
Kapoor and Associates, a two-partner LLP	Professional fees ₹1.2 crore	ITR-5	LLPs and partnership firms file ITR-5; partners report their share in ITR-3

What if you already filed the wrong form?

If the return has been filed and the mistake is noticed before 31 December 2026, file a revised return under section 139(5) in the correct form. The revised return replaces the original and no penalty applies. If a 139(9) defective return notice has already arrived, respond within 15 days through the e-Proceedings tab by uploading a corrected return in the right form.

Switching forms does not restart the clock

A revised return filed in a different form keeps the original filing date for interest and late fee purposes, as long as the original was filed by the due date and verified.

What to do next

List every income source from AIS, then run down the ITR-1 disqualifications first. If none apply, ITR-1 it is. If capital gains, a second house, foreign assets or NRI status appear, go to ITR-2. Any business or trading activity means ITR-3 or, for eligible presumptive cases, ITR-4. When in doubt, choose the more detailed form; the department never objects to extra disclosure.

Frequently asked questions

Can a salaried person with capital gains file ITR-1?

Only if the gains are long-term on listed equity or equity mutual funds under section 112A, total ₹1.25 lakh or less, and there is no loss to set off or carry forward. Any short-term gain, or long-term gain from property, debt funds or gold, requires ITR-2.

Which ITR form is for F&O trading?

ITR-3, because F&O income is treated as non-speculative business income. ITR-4 under 44AD is possible but generally unwise for traders with losses.

Can an NRI file ITR-1?

No. ITR-1 is restricted to ordinarily resident individuals. NRIs use ITR-2, or ITR-3 if they have business income in India.

What is the difference between ITR-3 and ITR-4?

ITR-4 is for presumptive income under 44AD, 44ADA or 44AE with total income up to ₹50 lakh. ITR-3 is for anyone with business or professional income who keeps books, has losses, exceeds the presumptive limits, or is otherwise barred from ITR-4.

I have two house properties. Which form?

ITR-2 if you have no business income, otherwise ITR-3. ITR-1 and ITR-4 permit only one house property.

Do I need ITR-2 if I hold US stocks through an Indian app?

Yes. Foreign shares are foreign assets and must be reported in Schedule FA, which exists only in ITR-2 and ITR-3. This applies even if you sold nothing during the year.

What happens if I file the wrong ITR form?

CPC issues a defective return notice under section 139(9). You get 15 days to file a corrected return in the right form; otherwise the return is treated as invalid and you are deemed not to have filed.

Can a pensioner use ITR-1?

Yes. Pension is taxed as salary, so a resident pensioner with one house property and interest income, total up to ₹50 lakh, files ITR-1. Family pension also fits ITR-1 under other sources.

Which ITR form does a partnership firm or LLP file?

ITR-5. The partners then file ITR-3 to report remuneration and interest received from the firm and their exempt share of profit.