Picking the wrong ITR form is the most common reason a return is marked "defective" (Section 139(9)) and has to be re-filed. The form depends on the sources of income and their size, not on whether you are "small". Here is the decision table for tax year 2025-26 (assessment year 2026-27), filed in 2026, and the same logic applies under the 2025 Act going forward.
The decision table
| Form | File it if | Not if |
|---|---|---|
| ITR-1 (Sahaj) | Resident individual; salary/pension + one house property + other sources (interest); total income ≤ ₹50 lakh; agricultural income ≤ ₹5,000; LTCG under 112A up to ₹1.25 lakh (allowed since AY 25-26) | Business/profession income, more than one house, foreign assets, capital gains beyond the 112A allowance, director in a company, unlisted shares, income > ₹50 lakh |
| ITR-2 | Individuals/HUFs with salary, multiple house properties, capital gains, foreign income/assets, income > ₹50 lakh, crypto/VDA — no business income | Any business or professional income |
| ITR-3 | Individuals/HUFs with business or professional income (actual books, or presumptive with other complexities), partners in firms, plus everything ITR-2 covers | You qualify for ITR-4 and want the short form |
| ITR-4 (Sugam) | Resident individual/HUF/partnership (not LLP) with presumptive income under 44AD (business, turnover ≤ ₹3 crore), 44ADA (profession, ≤ ₹75 lakh) or 44AE (transport); plus salary/one house/other sources; total income ≤ ₹50 lakh | Capital gains beyond 112A allowance, foreign assets, more than one house, income > ₹50 lakh, director/unlisted shares |
| ITR-5 | Partnership firms, LLPs, AOPs, BOIs | Individuals, companies |
| ITR-6 | Companies (except those claiming exemption under Section 11) | Everyone else |
| ITR-7 | Trusts, political parties, institutions under Sections 139(4A)–(4D) | — |
Typical cases
- Salaried, one house, FD interest, small equity LTCG → ITR-1.
- Salaried with mutual fund/stock gains above ₹1.25 lakh or a second flat → ITR-2.
- Freelance designer, receipts ₹30 lakh, opting for 44ADA → ITR-4. Read freelancer taxes.
- Kirana store, turnover ₹80 lakh, 44AD → ITR-4.
- Trader with turnover ₹2 crore keeping books, or profit below 6% wanting to declare actuals → ITR-3 (with audit if applicable).
- Doctor with clinic income and share trading → ITR-3.
- Partnership firm → ITR-5; the partners report their share/remuneration in ITR-3.
- Private limited company → ITR-6 (audit mandatory).
Presumptive schemes in one line each
- 44AD — business (not profession): declare 8% of cash turnover / 6% of digital turnover as profit; turnover ≤ ₹2 crore (₹3 crore if cash receipts ≤ 5%). Opt out and you're locked out for 5 years.
- 44ADA — specified professions: declare 50% of receipts; ≤ ₹50 lakh (₹75 lakh if cash ≤ 5%).
- 44AE — goods carriages: ₹1,000 per ton per month for heavy vehicles, ₹7,500 per vehicle per month otherwise.
Presumptive filers pay advance tax in one instalment by 15 March — advance tax calculator.
Audit thresholds (decides ITR-3 with audit report)
- Business: turnover above ₹1 crore (₹10 crore if cash receipts and payments ≤ 5%).
- Profession: receipts above ₹50 lakh.
- Declaring profit below the presumptive rate with income above the basic exemption → audit.
Due dates
| Filer | Due |
|---|---|
| Individuals/firms not requiring audit | 31 July |
| Audit cases | 31 October (audit report by 30 September) |
| Transfer-pricing cases | 30 November |
| Belated / revised return | 31 December |
| Updated return (ITR-U) | Up to 4 years after the end of the assessment year, with additional tax |
Documents to keep ready
Form 16/16A, AIS and TIS (download from the portal and reconcile — mismatches trigger notices), bank statements, interest certificates, capital gains statements from brokers/mutual funds, GST returns (turnover must match), Udyam certificate, rent receipts and landlord PAN (old regime), insurance/NPS proofs (old regime), Form 26AS for TDS credits. Check TDS with the TDS calculator and your regime choice with the old vs new calculator.
Common mistakes
- Filing ITR-1 with freelance income shown as "other sources" — defective.
- Ignoring crypto/VDA gains (Schedule VDA in ITR-2/3, 30% flat).
- Forgetting foreign assets/ESOPs of a foreign employer → ITR-2/3 with Schedule FA; penalties under the Black Money Act.
- Turnover in the ITR not matching GST turnover.
- Not verifying the return within 30 days of filing (e-verify with Aadhaar OTP).
FAQ
I have salary and a small side business. Which form?
ITR-4 if the side business fits 44AD/44ADA and other conditions hold; otherwise ITR-3.
Can I switch from ITR-4 to ITR-3 next year?
Yes. But exiting 44AD after having used it bars you from 44AD for five years (44ADA has no such lock).
Is ITR filing mandatory below the taxable limit?
Mandatory if gross income exceeds the basic exemption, or if you meet triggers like foreign travel spend > ₹2 lakh, electricity > ₹1 lakh, deposits > ₹1 crore in current accounts, or TDS/TCS ≥ ₹25,000 — and it's wise anyway for loans and visas.
Which form for an LLP?
ITR-5. LLPs are taxed at 30% + cess; partners report remuneration/interest in ITR-3.