Difference Between ITR 1, 2, 3, 4, 5, 6, 7: Which ITR Form to File
- Rajesh Kumar Kar
- Jul 10
- 9 min read
If an individual's annual income exceeds the basic exemption limit, they must file an ITR. To finish the income tax return filing procedure, taxpayers must fill out a variety of income tax return forms. These ITR forms are categorized according to the type of income. However, it can be difficult to choose the correct ITR form because each instance requires a different one. In this article, we will highlight ITR 1, ITR 2, ITR 3, ITR 5, and ITR 5, explain how they are different from each other, and help taxpayers understand which one they should file.
Table of Contents
What is ITR?
The Income Tax Return (ITR) is a form that taxpayers submit to the income tax department detailing their earnings and any necessary taxes. To date, seven forms, namely ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7, have been issued. It is imperative that all taxpayers submit their ITRs before the deadline. ITR forms are applicable in many ways according to the taxpayer's income sources, income amount, and taxpayer category (individuals, HUF, firms, etc.).
Types of ITR Forms
Now that you understand what ITR 1 2 3 4 5 6 7 means, let's examine each form in more detail so you can determine which one best fits your financial situation. Here is a detailed explanation of each ITR form along with the details of its applicability.
ITR 1 (SAHAJ)
This return form is intended for a resident individual whose entire income for the 2025–2026 academic year consists of:
Total income does not exceed Rs. 50 lakh;
Income from Salary/ Pension; or
Income from One House Property (except from situations in which a loss from a prior year is carried forward); or
Agricultural income up to the limit of Rs. 5,000
Income from Other Sources (not including lottery and horse race winnings)
Income from long-term capital gains up to Rs. 1.25 lakhs under section 112A (without a brought-forward or carry-forward capital loss)
Who Cannot Use ITR 1?
ITR 1 cannot be utilised in the following cases:
Anyone with a total income exceeding Rs 50 lakh
Anyone having taxable capital gains
Anyone with income from business or profession
Having income from multiple house properties
Agricultural income exceeding Rs 5000
A Director in a company
Having unlisted equity share investments during the financial year
Owning assets (including financial interest in an entity) overseas, including signing authority in any account outside India
Having any foreign income
Payment/deduction of tax deferred on ESOP
Having brought forward loss or loss to be carried forward under any income head
Having tax deducted under Section 194N
ITR 2
An individual or Hindu Undivided Family (HUF) may use ITR-2 if their entire income for the fiscal year 2025–2026 consists of the following:
Having income from Salary/Pension
Having income from House Property
Having income from Capital Gains
Income from Other Sources (not including lottery and horse race winnings)
Agricultural income exceeding Rs 5,000
A Director in a company
A Resident-not-Ordinarily Resident (RNOR) and Non-Resident
Having unlisted equity share investments during the financial year
Owning assets (including financial interest in an entity) overseas, including signing authority in any account outside India
Having any foreign income
Payment/deduction of tax deferred on ESOP
Having brought forward loss/ to be carried forward loss under any income head
Having tax deducted under Section 194N
Additionally, this Return Form can be utilized when someone else's income falls into any of the aforementioned categories and is to be combined with the assessee's income, such as a spouse, child, etc.
Who Cannot Use ITR 2?
A person whose total income for the fiscal year 2025–2026 includes income from business or a profession should not utilize this return form. You might have to opt for ITR 3 or ITR 4 to declare certain income types.
ITR 3
Individuals and Hindu Undivided Families (HUFs) who make money from a proprietary business or occupation that is not covered by the presumptive taxation scheme (Sections 44AD, 44ADA, or 44AE) are required to file the ITR-3 Form. This return must be filed if you are conducting commercial or professional activities and are obligated to keep books of accounts or submit to a tax audit. The following sources of income qualify individuals to submit an ITR-3:
Pursuing a business or profession without opting for presumptive income
Running a business or practicing a profession and being obliged to keep books of accounts and/or have them audited.
The return may comprise income from house property, salary or pension, and income from other sources if you invested in unlisted equity shares at any point during the financial year.
A person's income as a business partner
Who Cannot Use ITR 3?
HUFs or individuals qualified to file an ITR-1, ITR-2, or ITR-4
Taxpayers without any business or professional activity who solely have a wage, home property, or capital gains income
ITR 4 (SUGAM)
ITR-4 is applicable to residents who are HUFs, individuals, and partnership firms (except LLPs) with income following these criteria:
Income not more than Rs. 50 lakhs
Business revenue as determined by Section 44AD or 44AE's presumptive income scheme
Professional income as per the presumptive income scheme under Section 44ADA
Pension or salary income
Earnings from a single house property (not including the amount of forward or carryover losses)
Income from Other Sources (not including lottery and horse race winnings)
Income from long-term capital gains up to Rs. 1.25 lakhs under section 112A (without any carry-forward or brought-forward capital loss)
If their gross revenues are less than Rs. 50 lakhs, any freelancer receiving income from the aforementioned sources may also opt for the presumptive taxation system. When an individual or entity picks a presumptive basis, they are engaging in a presumptive income scheme under sections 44AD, 44AE, and 44ADA. However, the taxpayer will be required to file an ITR-3 if the firm turnover is above Rs 2 crore.
Who Cannot Use ITR 4?
Having total income exceeding Rs 50 lakh
Having income from multiple one house properties
Owning any foreign asset/signing authority in any account outside India
Having income from a source outside India
A Director in a company
A resident not ordinarily resident (RNOR) and non-resident
Having unlisted equity shares investments during the financial year
Anyone liable for another person's income from which that other person's taxes are deducted
If tax payments or deductions have been postponed on ESOP
Having to carry forward any losses under any income head, or if you have any brought forward losses,
ITR 5
Limited Liability Partnerships (LLPs), Firms, Associations of Persons (AOPs), Artificial Juridical Persons (AJPs), Bodies of Individuals (BOIs), estates of deceased or insolvent individuals, investment funds, and business trusts are among the entities that are designated to file the Income Tax Return Form ITR-5.
Who Cannot Use ITR 5?
Individuals, HUFs, companies, and a person are required to file Form ITR 7 to claim the exemption of Section 11 cannot file ITR 5.
ITR 6
For businesses not seeking exemptions under Section 11, ITR 6 is the authorised Income Tax Return form. Entities whose revenue does not come from assets held for religious or philanthropic purposes are eligible to use this form. The only way to file an ITR 6 is online, and businesses must use a digital signature while filing this form.
Who Cannot Use ITR 6?
Section 11 formed with a charitable or religious purpose and individuals required to file ITR 7 cannot use ITR 6.
ITR 7
For individuals and businesses that must file returns in accordance with Section 139(4A), Section 139(4B), Section 139(4C), Section 139(4D), Section 139(4E), or Section 139(4F).
Every individual who receives income from property held in trust or from other legal obligations that are entirely or partially used for charity or religious purposes is obligated to make a return under section 139(4A).
A political party is required to file a return under Section 139(4B) if its total revenue, excluding the provisions of Section 139A, is more than the maximum amount exempt from income tax.
All of the following must file a return under section 139(4C): scientific research associations; news agencies; a fund, university, other educational institution, hospital, or other medical facility; an association or institution included in Section 10(23A); an institution includes in Section 10(23B); etc.
Every university, college, or other institution exempt from providing details of revenue or loss under any other provision of this section must file a return under Section 139(4D).
Every business trust that is not obligated to provide a report of revenue or loss under any other provisions of this section must file a return under Section 139(4E).
Any investment fund listed in Section 115UB must file a return under Section 139(4F). No other provisions of this section require it to provide a return of revenue or loss.
Who Cannot Use ITR 7?
The ITR 7 Form is not available for use by anybody other than the individuals listed above. ITR 7 will not be applicable to income unconditionally exempt starting in AY 2022–2023.
An Overview of ITR 1 to ITR 7 Details: Which ITR Form to File
Form | Applicable to | Salary | House Property | Business Income | Capital Gains | Other Sources | Exempt Income | Lottery Income | Foreign Assets/Income | Carry Forward Loss |
ITR-1 / Sahaj | Individual, HUF (Residents) | Yes | Yes (One) | No | No | Yes | Yes (Agriculture) | No | No | No |
ITR-2 | Individual, HUF | Yes | Yes | No | Yes | Yes | Yes | Yes | Yes | Yes |
ITR-3 | Individual or HUF, Partner in Firm | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
ITR-4 | Individual, HUF, Firm (non-LLP) | Yes | Yes (One) | Presumptive | No | Yes | Yes (Agriculture) | No | No | No |
ITR-5 | Firms, LLPs, AOPs, BOIs | No | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
ITR-6 | Companies (Non-Section 11) | No | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
ITR-7 | Trusts, Charitable Entities | No | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Conclusion
Every Indian taxpayer must comprehend what ITR 1 2 3 4 5 6 and 7 means. There is an ITR form that is specific to your financial profile, regardless of whether you are a business owner, freelancer, salaried employee, or a partner in a partnership or firm. Completing the correct form guarantees peace of mind, quicker returns, and legal compliance.
Frequently Asked Question
Q1. What is ITR full form?
With the help of the Income Tax Return, or ITR, taxpayers can submit their earnings and tax payments to the tax department. A taxpayer has until the deadline to file their ITR.
Q2. Who should file ITR 1?
ITR 1 is for residents earning an income of up to Rs. 50 lakh from a salary, a single-family home, and other sources (except lottery or racing earnings). It also not for directors, foreign nationals, or those with foreign income or capital gains.
Q3. What is the meaning of ITR 1 to ITR 6?
Every ITR form, from 1 to 6, is applicable to diverse taxpayer groups and income types. These are:
ITR-1: Salaried people with basic incomes
ITR-2: People with foreign assets or capital gains
ITR-3: Professionals or business owners
ITR-4: Users of Presumptive Income Scheme
ITR-5: Firms, LLPs, AOPs, and BOIs
ITR-6: Companies (that do not seek exemption as per Section 11)
Q4. Which is the ITR applicable to salaried employees?
ITR 1 is applicable to salaried employees.
Q5. Can I file ITR 2 if I earn business income?
No. ITR 2 is not allowed for individuals with business/professional income. In that scenario, they need to utilise ITR 3.
Q6. What is the difference between ITR 1 and ITR 2?
Income from salaries and pensions, one-home property, and other sources—with the exception of lottery and racehorses—as well as agricultural income up to Rs. 5,000 are all subject to ITR 1. However, ITR 2 covers more complicated revenues, such as capital gains, foreign income, more than one home property, and agricultural income beyond Rs. 5,000.
Q7. What is the difference between ITR 3 and ITR 4?
Business or professional income reported on a presumptive basis under sections 44AD, 44ADA, or 44AE is subject to ITR-4, while income reported on a non-presumptive basis is subject to ITR-3. The blog mentioned above offers numerous further distinctions.
Q8. What is the difference between ITR 1 and ITR 4?
Residents who have one house property, salaries, and other specified sources of income are eligible to file an ITR-1. ITR-4, on the other hand, is applicable to resident individuals, HUFs, or firms, with the exception of LLPs that have business and professional income, which is calculated on a presumptive approach under Sections 44AD, 44ADA, and 44AE.
Q9. Can ITR 5 or ITR 6 be filed by an individual?
No. Based on eligibility and income, individuals are allowed to only submit ITRs 1, 2, 3, or 4. ITRs 5 and 6 are for businesses and corporations.
Q10. Can a salaried person file ITR 4?
Yes, provided that their total income does not exceed Rs. 50 lakh and they have a presumptive business or professional income in addition to their salary.
Q11. Which ITR form to fill for self-employed?
ITR-3 or ITR-4 is applicable to a self-employed.
Q12. What is the outcome of filing the wrong ITR form?
If an incorrect ITR form is filed, your return can be deemed defective. Under Section 139(9), you will receive a notification and have a certain amount of time to amend the return.
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