What is the story about?
ITR-1 (Sahaj): For simple income cases
Who should file?
ITR-1 is designed for resident individuals with total income up to Rs 50 lakh from salary, pension, one or two house properties, and other sources like interest or dividends. It can also be used by those with long-term capital gains (LTCG) up to Rs 1.25 lakh under Section 112A.
ITR-2: For those with complex incomes
Who should file?
ITR-2 is meant for individuals and Hindu Undivided Families (HUFs) who are not eligible for ITR-1 and do not have income from “profits and gains from business or profession.” It is commonly used by company directors and those holding unlisted equity shares.
ITR-2 now includes the Section 89A relief field, which was removed from ITR-1 and ITR-4.
ITR-3: For taxpayers with business or professional income
Who should file?
ITR-3 is for individuals and HUFs having income from salary/pension, house property, capital gains, business/profession, and other sources. It is typically used by those not eligible for ITR-1, ITR-2, or ITR-4.
The form now includes a field to report foreign assets or retirement income.
ITR-4 (Sugam): For presumptive taxation
Who should file?
ITR-4 is for individuals, HUFs, and resident firms (other than LLPs) opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE. It also covers income from salary, house property (up to two), and other sources.
Similar to ITR-1, it supports reporting of two house properties and unrealised rent. The Section 89A field has been removed. Agricultural income up to Rs 5,000 and LTCG up to Rs 1.25 lakh (Section 112A) are also permitted.
