Understanding ITR Filing: Find the Right Tax Return Form for Your Needs Eligibility Criteria for ITR-1 to ITR-7 Explained
Filing income tax returns (ITR) for the financial year 2025-26 requires careful selection of the appropriate form, especially for salaried taxpayers who often confuse ITR-1 and ITR-2. There are seven ITR forms available, and changes occur annually, making it essential for taxpayers to verify their eligibility each year. Richa Sawhney, Tax Partner at Grant Thornton Bharat, emphasizes that taxpayers should not assume their previous year’s form is still applicable.
Taxpayers must consider their income profile, residential status, and transaction types when selecting their ITR form. Sawhney advises that these factors can change yearly, necessitating a reassessment to ensure accurate reporting and smooth processing of returns. For the assessment year 2026-27, returns will be governed by the provisions of the Income-tax Act, 1961.
Which ITR Form is Right for You?
The ITR forms applicable for assessment year 2026-27 include:
ITR-1 (SAHAJ)
Eligible persons include resident individuals (excluding not ordinarily residents). Those who can file ITR-1 must have total income not exceeding Rs 50 lakhs, income from salary or family pension, income from house property (owning no more than two houses), and long-term capital gains under section 112A not exceeding Rs 1.25 lakhs. Individuals with income from business, foreign assets, or agriculture income exceeding Rs 5,000 cannot file this form.
ITR-2
This form is for resident individuals, including not ordinarily residents, and non-residents. Eligible filers include those with income from salary, pension, house property, capital gains, and other sources, provided their total income exceeds Rs 50 lakhs or they have foreign assets. Individuals and HUFs with income from business or profession cannot use this form.
ITR-3
ITR-3 is available for individuals and HUFs with income from all sources, including business or profession. Those eligible can also carry forward losses under any head of income. However, individuals eligible for ITR-1, ITR-2, and ITR-4 cannot file this form.
ITR-4 (SUGAM)
This form is for resident individuals and HUFs (excluding not ordinarily residents) and resident firms (excluding LLPs). Eligible filers must have income from business or profession under the presumptive scheme of tax, with total income not exceeding Rs 50 lakhs. Those with foreign assets or income, or who are directors in companies, cannot file ITR-4.
ITR-5
ITR-5 is required for firms, including LLPs, AOPs, BOIs, and local authorities.
ITR-6
Companies must file ITR-6.
ITR-7
This form is for charitable and religious trusts, political parties, research associations, mutual funds, securitization trusts, educational institutions, and hospitals.
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