The Income Tax Department has introduced the latest ITR forms for the financial year 2024–25, making it easier for taxpayers to file returns smoothly. ITR-1, ITR-2, ITR-3, ITR-4, and ITR-5 are now available. To help you pick the right one, here’s a clear and simple breakdown.
ITR-1 (Sahaj)
This form is designed for resident individuals with a total income up to Rs 50 lakh. If your earnings come from salary, pension, one house property, interest from savings or fixed deposits, or agricultural income (not exceeding Rs 5,000), ITR-1 is your go-to. However, you cannot use ITR-1 if you are a company director, have unlisted equity shares, business or professional income, foreign assets, or capital gains above the specified limit.
ITR-2
If you do not qualify for ITR-1, ITR-2 is the next option. It is suitable for individuals and Hindu Undivided Families (HUFs) who do not have business or professional income. You can use ITR-2 if you have income from more than one house property, capital gains, or foreign assets. It is also the right form if you need to include the income of your spouse or minor child as part of your own.
ITR-3
This form is for individuals and HUFs who earn from a business or profession. If you are a doctor, lawyer, chartered accountant, or run any business where your income is calculated from actual profits and you maintain detailed accounts, ITR-3 is the form you should use.
ITR-4 (Sugam)
ITR-4 is ideal for small business owners, professionals, and firms (excluding LLPs) with total income up to Rs 50 lakh. If your business or professional income is calculated on a presumptive basis under sections 44AD, 44ADA, or 44AE of the Income Tax Act, this is the correct form for you.
ITR-5
ITR-5 is for entities such as partnership firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and similar organisations. This form is not for individuals.
Choosing the right ITR form is essential for a hassle-free tax return process. Before you start, check your income sources and category to ensure you select the form that matches your needs.
