Which ITR to File in FY 2024-25? Types of ITR Forms and Applicability

There are various types of ITR forms, applicable specifically for different kinds of taxpayers, based on their sources of income, residential status, level of income, legal status of the taxpayer (individual, firm, company), etc., 

Key Highlights

The ITR form applicable depends on the type and amount of income of the taxpayer as follows: 

• ITR 1: Salaried individuals with income up to Rs. 50 lakh
• ITR 2: Individuals with capital gains
• ITR 3: Income from business or profession
• ITR 4: Income From Business and Profession < Rs. 50 lakh
• ITR 5: Firms, LLPs, AOPs, and BOIs
• ITR 6: Companies 
• ITR 7: Charitable trusts

What is ITR?

Income Tax Return (ITR) is a form used by taxpayers to report their income and taxes to the Income Tax Department. There are seven ITR forms (ITR-1 to ITR-7), and the correct form depends on factors like income source, income amount, and taxpayer category (individual, HUF, company, etc.). Filing must be done before the specified due date each year.

Different Types of ITR Forms

Applicability of different kinds of ITR forms are explained elaborately below.

ITR-1 or SAHAJ

ITR-1, also known as Sahaj, is the income tax return form for resident individuals (not HUFs or companies) with total income up to ₹50 lakh. It is applicable for those earning income from:

• Total income not exceeding Rs. 50 lakh
• Income from Salary/ Pension; or
• Income from One House Property (excluding cases where loss is brought forward from previous years); or
• Income from Other Sources (excluding Winning from Lottery and Income from Race Horses)
• Long-term capital gains income u/s 112A up to Rs. 1.25 lakhs (having no brought-forward or carry-forward capital loss)
• Agricultural income up to Rs 5,000.

Who Cannot use ITR-1 Form?

• Total income exceeding Rs 50 lakh
• Agricultural income exceeding Rs 5000
• If you have taxable capital gains
• If you have income from business or profession
• Having income from more than one house property
• If you are a Director in a company
• If you have investments in unlisted equity shares at any time during the financial year
• Owning assets (including financial interest in any entity) outside India, including signing authority in any account located outside India
• If you are a Resident-not-Ordinarily Resident (RNOR) and Non-Resident
• Having any foreign income
• If tax has been deducted under Section 194N
• If in case payment or deduction of tax has been deferred on ESOP
• If you have any brought forward loss or loss needs to be carried forward under any income head

ITR-2

ITR-2 is the income tax return form for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. It is applicable when your total income includes:

• Income from Salary/Pension
• Income from House Property
• Income from Other Sources (including Winnings from Lottery and Income from Horse Races)
• If you are an Individual Director in a company
• If you have had investments in unlisted equity shares at any time during the financial year
• Being a Resident-not-Ordinarily Resident (RNOR) and Non-Resident
• Income from Capital Gains
• Having any foreign income
• Agricultural income more than Rs 5,000
• Owning assets (including financial interest in any entity) outside India, including signing authority in any account located outside India
• If tax has been deducted under Section 194N
• If in case payment or deduction of tax has been deferred on ESOP
• If you have any brought forward loss or loss needs to be carried forward under any income head

Further, in a case where the income of another person like one’s spouse, child etc. is to be clubbed with the income of the assessee, this Return Form can be used where such income falls in any of the above categories. The total income can be more than Rs 50 Lakhs.

Who Cannot use ITR-2?

Tax payers with Income from Business or Profession cannot file ITR-2. 

ITR-3

ITR-3 is the Income Tax Return form for individuals and Hindu Undivided Families (HUFs) who have income from a business or profession. The persons having income from the following sources are eligible to file ITR-3:

• Having Income From Business and Profession (both presumptive taxation and audit cases)
• If you have had investments in unlisted equity shares at any time during the financial year
• The return may include income from House property, Salary/Pension, and Income from other sources
• Income of a person as a partner in the firm

In short, individuals or HUFs who are not eligible to file ITR-1, ITR-2, and ITR-4 should file ITR-3

ITR 4 or Sugam

ITR-4 (also known as Sugam) is the Income Tax Return form for individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) who have opted for the presumptive income scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act.

• Total income not exceeding Rs. 50 lakh
• Business and professional income
• Income from salary or pension 
• Income from one house property (excluding the amount of brought forward loss or loss to be carried forward)
• Income from other sources (excluding income from lottery and race-horses )
• Long-term capital gains income u/s 112A up to Rs. 1.25 lakhs (having no brought-forward or carry-forward capital loss)

Please note that any individual earning income from the above-mentioned sources as a freelancer can also opt for the presumptive taxation scheme if their gross receipts are not more than Rs. 50 lakhs.

A presumptive income scheme under sections 44AD, 44AE, and 44ADA is when an individual or an entity opts to derive its income on a presumptive basis, i.e. when the income is presumed at a minimum rate based on a percentage of gross receipts / gross turnover or based on ownership of commercial vehicles. However, if the business turnover exceeds Rs 2 crore, the taxpayer will have to file ITR-3.

Who Cannot Use ITR-4 Form?

• If your total income exceeds Rs 50 lakh
• Having income from more than one house property
• Owning any foreign asset
• If you have signing authority in any account located outside India
• Having income from any source outside India
• If you are a Director in a company
• If you have had investments in unlisted equity shares at any time during the financial year
• Being a resident not ordinarily resident (RNOR) and non-resident
• Having foreign income or assets
• If you are assessable in respect of the income of another person in respect of which tax is deducted in the hands of the other person.
• If in case payment or deduction of tax has been deferred on ESOP
• If you have any brought forward loss or loss needs to be carried forward under any income head

ITR-5

ITR-5 is the Income Tax Return form applicable to entities other than individuals, HUFs, companies, and those filing ITR-7. It is meant for partnership firms, LLPs, AOPs, BOIs, and other similar entities.

ITR-6

ITR-6 is the Income Tax Return form applicable to companies other than those claiming exemption under Section 11 (i.e., income from property held for charitable or religious purposes).

ITR-7

ITR-7 is the Income Tax Return form applicable to persons (including companies) who are required to file returns under sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act, primarily related to charitable, religious, and specified institutions.

• Return under section 139(4A) is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.
• Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount, not chargeable to income-tax.
• Return under section 139(4C) is required to be filed by every –
  • Scientific research association;
  • News agency;
  • Association or institution referred to in section 10(23A);
  • Institution referred to in section 10(23B);
  • Fund or institution or university or other educational institution or any hospital or other medical institution.
• Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish a return of income or loss under any other provision of this section.
• Return under section 139(4E) must be filed by every business trust which is not required to furnish a return of income or loss under any other provisions of this section.
• Return under section 139(4F) must be filed by any investment fund referred to in section 115UB. It is not required to furnish a return of income or loss under any other provisions of this section.

Which ITR Form to File?

Choosing the correct ITR form depends on your income type, taxpayer category, and income level. For example, ITR-1 is for salaried individuals with income up to ₹50 lakh, while ITR-3 is for those with business or professional income. Knowing the right ITR form helps ensure accurate and hassle-free filing with the Income Tax Department.

The below table offers details about which ITR form to file and the eligibility for such ITR forms:

Income Tax Form FY 2024-25 PDF Download: How To Download ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7 Forms

Other Forms required to File ITR

Form 16

• Form 16, is one of the most important documents in the ITR filing process.
• It is prepared annually, and is provided by the employer. It is divided into 2 parts, Part-A and Part-B.
• Part - A contains details of TDS deducted against your salary, whereas Part-B contains estimated total income, eligible deductions, estimated tax payable.

Form 26AS

• Form 26AS is a consolidated TDS statement, containing all the TDS deducted against the taxpayer throughout the year. 
• Apart from that, it contains income against which TDS is deducted, full particulars of SFT transactions during the year, turnover of the assessee as per GST records, etc.,  

Form 10-IEA, Form 10B are other popular forms that needs to be filed in specific circumstances to file ITR.

Why Should You File ITR?

Not filing an ITR has its consequences. However, ITR filing is more beneficial rather than a burden. The following the are benefits of filing an ITR: 

• If you want to claim an income tax refund from the department.
• If you have earned from or have invested in foreign assets during the FY.
• If you wish to apply for a visa or a loan
• If the taxpayer is a company or a firm, irrespective of profit or loss.
• If you have a loss from business/profession or under capital gains head, you will not be allowed to carry them forward to the next years unless you file the return before the due date.