Every July the same question floods search: which ITR form am I supposed to file? Here is the short answer for most people. If you are salaried, earn under ₹50 lakh, and did not sell any shares or mutual funds during the year, you file ITR-1 (Sahaj). The moment capital gains enter the picture — or your income crosses ₹50 lakh — you move to ITR-2. Freelancers and business owners use ITR-3 or ITR-4.
The rest of this guide explains how to be sure which one applies to you, what documents to keep ready, how the filing actually works, and what happens if you miss the deadline. One important clarification first: the return you file by 31 July 2026 is for the financial year 2025-26 (assessment year 2026-27) — that is, the money you earned between April 2025 and March 2026.
ITR-1 (Sahaj): the form most salaried people need
ITR-1 is the simplest return, and it covers the majority of salaried taxpayers. You can use it if your total income is up to ₹50 lakh and it comes from salary or pension, up to two house properties, and other sources such as bank or FD interest. It also now accommodates long-term capital gains under Section 112A of up to ₹1.25 lakh — the small equity gains many ordinary investors have.
You cannot use ITR-1 if you are a company director, hold unlisted equity shares, or have any foreign income or foreign assets. If any of those apply, you are in ITR-2 territory regardless of how simple the rest of your finances look.
ITR-2: the moment investments enter the picture
ITR-2 is for individuals and HUFs who do not have business or professional income, but whose situation is a step more complex than ITR-1 allows. You need it if your total income exceeds ₹50 lakh, if you have capital gains beyond what ITR-1 permits, if you own more than two house properties, if you have foreign income or assets, or if you are a director or hold unlisted shares.
On capital gains specifically, the line is sharper than most people realise. Any short-term capital gain, any long-term gain above the ₹1.25 lakh 112A limit, and any brought-forward losses you want to carry forward all push you into ITR-2. If you are working out what your gains actually are, our capital gains tax calculator separates short-term from long-term for equity, mutual funds, property and gold.
ITR-3 and ITR-4: freelancers and business owners
If you earn from a business or profession — freelancing, consulting, a shop, a practice — you are outside ITR-1 and ITR-2 entirely.
ITR-3 is for individuals and HUFs with income from a business or profession who maintain regular books of account. It is the most detailed of the individual forms and also covers people who have business income alongside salary, capital gains and everything else.
ITR-4 (Sugam) is the simplified option for those opting for the presumptive taxation scheme (Sections 44AD, 44ADA and 44AE), where you declare a fixed percentage of turnover or receipts as income instead of maintaining full books. It suits many small businesses and independent professionals with modest turnover, provided total income stays within the prescribed limit and the other ITR-1-style exclusions (foreign assets, directorship and so on) don't apply.
The mistake that catches most salaried filers
This is the single most common ITR error, and it is worth stating plainly: salaried employees who sold shares or redeemed mutual funds during the year often file ITR-1 by habit, when they should have filed ITR-2.
Even one equity mutual fund redemption that produces a capital gain beyond the small 112A allowance disqualifies you from ITR-1. A redeemed SIP, a switched fund, a few sold shares — all of it counts. Filing the wrong form can make your return defective, forcing you to revise it later. Before you pick a form, check your capital gains statement from your broker or the AMC, not just your Form 16.
What documents to keep ready
Gather these before you start and the filing itself takes minutes rather than an evening.
Your PAN and Aadhaar (they must be linked), and your bank account details for any refund. Form 16 from your employer, which summarises your salary and the TDS deducted. Your AIS (Annual Information Statement) and Form 26AS from the income tax portal — these show the income and tax the department already knows about, and your return should agree with them. Bank and FD interest certificates, since interest is taxable and is frequently forgotten. A capital gains statement from your broker or mutual fund house if you sold anything. And your investment and deduction proofs — 80C, 80D, home-loan interest, HRA rent receipts — if you are filing under the old regime.
How the filing actually works
Filing is done on the government's own portal, incometax.gov.in. There is no need to pay a third party for a straightforward salaried return.
You log in with your PAN as the user ID, choose ‘File Income Tax Return’, select the assessment year (AY 2026-27 for income earned in FY 2025-26), and pick your status and the correct form. The portal now pre-fills a great deal from your Form 16, AIS and 26AS — but check every pre-filled figure rather than trusting it, especially interest income and capital gains. Add anything missing, claim your deductions, and the portal computes your tax and any refund or balance due.
The step people forget is the last one: after submitting, you must e-verify within 30 days. The quickest route is an Aadhaar OTP; net banking and EVC also work, or you can post a signed ITR-V to CPC Bengaluru. An unverified return is treated as never filed, so do this immediately rather than leaving it for later.
The deadline, and what missing it costs
For individuals whose accounts do not require an audit — which covers virtually all salaried people and most freelancers — the due date for filing the FY 2025-26 return is 31 July 2026. Deadlines are occasionally extended by the government, so it is worth confirming the current date on the official portal rather than relying on memory.
Missing it is not fatal, but it is expensive. A late fee under Section 234F applies — ₹1,000 if your total income is up to ₹5 lakh, and ₹5,000 above that — plus interest on any unpaid tax. More painfully, you lose the right to carry forward certain losses (such as capital losses) to set against future gains, which can cost far more than the fee itself over time. Filing a belated return is still much better than not filing at all.
Old regime or new regime?
Picking the form is only half the decision; you also choose a tax regime. The new regime has lower slab rates but almost no deductions, while the old regime rewards those with substantial 80C investments, HRA and home-loan interest. Which one saves you more depends entirely on your own numbers, and the answer flips at different income and deduction levels.
Rather than guess, run both through our income tax calculator, which compares the regimes side by side. If you want to understand the deductions themselves first, our guide on how to save income tax in India walks through 80C, 80D, NPS and the rest, and the HRA calculator tells you how much of your rent allowance is actually exempt.
A short checklist before you file
Confirm your PAN and Aadhaar are linked, or the return will not go through. Reconcile your AIS and 26AS with your own records so nothing is missing or double-counted. Report all income, including savings and FD interest and any freelance work, not only what appears on Form 16. Pick the right form using the capital-gains test above. And e-verify immediately after submitting.
If your situation is genuinely complicated — significant capital gains, foreign assets, business income, or notices from previous years — a qualified chartered accountant is worth the fee. For a straightforward salaried return, the portal is designed for you to do it yourself.
This article is general educational information based on the rules as they stand for AY 2026-27, not personalised tax advice. Tax rules, limits and deadlines change, so always confirm the current position on incometax.gov.in before you file, and consult a qualified professional for anything complex.