Which ITR Form to File — India FY 2025-26
A plain-language guide to choosing the right ITR form for FY 2025-26. ITR-1, ITR-2, ITR-3, or ITR-4 explained simply.
Updated: March 2025
Quick answer
| Your situation | File this form |
|---|---|
| Only salary, interest income, one house property, income below ₹50L, no stock sales | ITR-1 |
| Salary + stocks or mutual funds sold, income above ₹50L, or foreign assets | ITR-2 |
| F&O trading, intraday, business income, or YouTube/AdSense treated as business | ITR-3 |
| Small business under 44AD or freelancer/professional under 44ADA, no stock sales | ITR-4 |
| Partnership firm or LLP | ITR-5 |
ITR-1 (Sahaj) — simplest form
You can use ITR-1 only if ALL of the following are true:
- Income only from salary, one house property, and interest
- Total income below ₹50 lakh
- No capital gains of any kind (no stocks, no MF redemptions, no property sales)
- No foreign assets or income
- No directorships in any company
Sold even one unit of mutual fund or one share of stock? You cannot use ITR-1 — switch to ITR-2. This is the most common mistake and can result in a defective return notice.
ITR-2 — for capital gains and higher income
Use ITR-2 if you have salary income PLUS any of:
- Capital gains from stocks, mutual funds, property, or any other asset
- More than one house property
- Foreign income or foreign assets (US stocks, NRE account income, foreign property)
- Total income above ₹50 lakh
- Multiple employers in the same year
- Unlisted equity shares or ESOPs
ITR-3 — for business and trading income
ITR-3 is required if you have:
- F&O (futures and options) trading — treated as non-speculative business income
- Intraday equity trading — treated as speculative business income
- Commodity trading
- Digital income (YouTube, AdSense, affiliate) treated as business
- Part-time business + salary
- Business income + capital gains (cannot use ITR-4 in this case)
Even a single F&O trade in a year means you need ITR-3. ITR-3 is complex — a CA is recommended for F&O traders, especially those with losses.
ITR-4 (Sugam) — for small business and freelancers
ITR-4 is for the presumptive tax scheme — a simplified way to calculate income:
- Freelancers, consultants, or professionals under Section 44ADA (receipts ≤ ₹75 lakh) — pay tax on 50% of receipts
- Small traders or businesses under Section 44AD (turnover ≤ ₹3 crore) — pay tax on 8% of turnover
- No capital gains (any stock sale moves you to ITR-3)
- Total income below ₹50 lakh
Filed the wrong form?
| When you realized | Option | Cost |
|---|---|---|
| Before July 31 (same year) | Revised return — no penalty | Free |
| After July 31 (within 2 years) | Updated return — extra tax applies | +25% or +50% on underpaid tax |
| Got a notice | Respond through a CA | Professional fees |
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