Which ITR Form Should You File? Complete Guide for AY 2026-27
ITR-1, ITR-2, ITR-3, or ITR-4 — filing the wrong form gets your return treated as defective. This guide tells you exactly which form applies to your income type, with 17 real scenarios, deadlines, and penalty rules for FY 2025-26 (AY 2026-27).
Key Takeaways — AY 2026-27 Filing
- •ITR-1 is for salaried individuals with income ≤ ₹50 lakh — now allows up to 2 house properties and LTCG u/s 112A up to ₹1.25 lakh (both expanded for AY 2026-27). No foreign assets, no directorship.
- •NEW for AY 2026-27: ITR-1 now allows LTCG u/s 112A up to ₹1.25 lakh — but any STCG, LTCG beyond ₹1.25L, or brought-forward losses still require ITR-2. Most mutual fund/stock investors will need ITR-2.
- •Due date: July 31, 2026 for non-audit individuals. Late filing penalty: ₹5,000 (₹1,000 if income ≤ ₹5L). After Dec 31, 2026 — no filing allowed.
- •New tax regime is the default — salaried individuals (ITR-1/ITR-2) can choose the old regime directly inside the ITR return; no separate form needed. Taxpayers with business/profession income must file Form 10-IEA to opt out.
Jul 31
Filing Deadline
Non-audit individuals, AY 2026-27
7 Forms
ITR-1 to ITR-7
Each for a different taxpayer category
₹5,000
Late Filing Penalty
Sec 234F (₹1,000 if income ≤ ₹5L)
Which ITR Form to Use? Complete Eligibility for Each Form
There are 7 ITR forms (ITR-1 through ITR-7), each designed for a specific type of taxpayer. Filing the wrong form results in a defective return notice under Section 139(9) — and if not corrected within 15 days, your return is treated as never filed.
The most common mistake: salaried employees who redeemed mutual funds or sold stocks during the year file ITR-1 instead of ITR-2. Even a single equity mutual fund redemption with capital gains disqualifies you from ITR-1.
✅ Allowed Income Types:
Salary/pension, up to 2 house properties (expanded from 1 for AY 2026-27), other sources (interest, dividends ≤ ₹10L, family pension), agricultural income ≤ ₹5,000, LTCG u/s 112A up to ₹1.25 lakh (NEW for AY 2026-27)
❌ NOT for:
Capital gains beyond ₹1.25L LTCG u/s 112A, more than 2 house properties, foreign income/assets, business income, director of company, unlisted shares, dividend > ₹10L, brought-forward losses
✅ Allowed Income Types:
All of ITR-1 plus: capital gains (STCG, LTCG beyond ₹1.25L), 3+ house properties, foreign income/assets, dividend > ₹10L, agricultural income > ₹5,000, NRI/RNOR income, unlisted shares, director of company
❌ NOT for:
Business or professional income (use ITR-3)
✅ Allowed Income Types:
All of ITR-2 plus: business income, professional income, F&O trading, partnership firm income (as partner), freelancing without presumptive taxation
❌ NOT for:
Only if you prefer presumptive taxation (use ITR-4). Firms, companies, trusts use separate forms.
✅ Allowed Income Types:
Presumptive business income under Sec 44AD (turnover ≤ ₹3 Cr), presumptive professional income under Sec 44ADA (receipts ≤ ₹75L), salary, one house property, other sources
❌ NOT for:
Capital gains, more than one house property, foreign assets, brought-forward losses, agricultural income > ₹5,000, director of company
ITR-5, ITR-6, ITR-7 — For Entities (Not Individuals)
| Form | Who Files |
|---|---|
| ITR-5 | Partnership firms, LLPs, AOPs, BOIs, artificial juridical persons |
| ITR-6 | Companies (not claiming Sec 11 exemption) |
| ITR-7 | Trusts, political parties, institutions, universities, colleges, Sec 139(4A)/(4B)/(4C)/(4D) entities |
There are 7 ITR forms for AY 2026-27: ITR-1 (Sahaj) for resident salaried individuals with income up to ₹50 lakh — including, new for AY 2026-27, LTCG u/s 112A up to ₹1.25 lakh with no brought-forward losses (but not STCG, non-112A gains, or 112A gains above ₹1.25 lakh); ITR-2 for individuals/HUFs with STCG, non-112A capital gains, 112A LTCG above ₹1.25 lakh, foreign assets, or more than 2 properties; ITR-3 for business/professional income; ITR-4 (Sugam) for presumptive taxation; ITR-5 for firms/LLPs; ITR-6 for companies; and ITR-7 for trusts and institutions (Income Tax Act, 1961, Sec 139).
17 Real Scenarios: Which ITR Form Applies to You?
Find your exact situation below. This table covers the most common — and commonly confused — scenarios for AY 2026-27 filing.
| Your Situation | ITR Form | Why |
|---|---|---|
| Salaried employee (income ≤ ₹50L, no stocks/MF) | ITR-1 | Salary + up to 2 house properties + bank interest only |
| Salaried + equity LTCG u/s 112A ≤ ₹1.25 lakh only | ITR-1 | NEW for AY 2026-27: ITR-1 now allows limited LTCG u/s 112A (no brought-forward losses) |
| Salaried + capital gains beyond ₹1.25L or STCG | ITR-2 | Capital gains beyond the ₹1.25L LTCG limit or any STCG require ITR-2 |
| Salaried + F&O trading | ITR-3 | F&O is non-speculative business income — needs ITR-3 |
| Freelancer (receipts ≤ ₹75L, presumptive) | ITR-4 | Sec 44ADA presumptive scheme with ₹75L limit (₹50L if cash > 5%) |
| Freelancer (receipts > ₹75L or actual expenses) | ITR-3 | Cannot use presumptive taxation; must file ITR-3 |
| Salaried + rental income from 1-2 properties | ITR-1 | NEW: ITR-1 now allows up to 2 house properties for AY 2026-27 |
| Salaried + rental income from 3+ properties | ITR-2 | ITR-1 allows only up to 2 house properties |
| Salaried + foreign income or foreign assets | ITR-2 | Schedule FA (Foreign Assets) only in ITR-2/3 |
| NRI with Indian income | ITR-2 | NRIs/RNORs cannot file ITR-1 or ITR-4 |
| Director of a company (even unpaid) | ITR-2 | Director status disqualifies ITR-1 and ITR-4 |
| Total income > ₹50 lakh (any source) | ITR-2 | ITR-1 and ITR-4 have ₹50L income ceiling |
| Small business owner (turnover ≤ ₹3 Cr, presumptive) | ITR-4 | Sec 44AD presumptive scheme for business |
| Business with losses to carry forward | ITR-3 | ITR-4 does not allow loss carry-forward |
| Crypto / VDA income | ITR-2 | Crypto gains reported under Schedule VDA in ITR-2/3 |
| ESOP income from listed/unlisted company | ITR-2 | ESOP perquisite + capital gains require ITR-2 |
| Income from winning lottery, horse racing, games | ITR-2 | Special rate income (Sec 115BB) reported in ITR-2/3 |
| Partnership firm or LLP | ITR-5 | Firms/LLPs file ITR-5 (not individual forms) |
| Private / Public limited company | ITR-6 | All companies file ITR-6 |
Pro tip: When in doubt, file the higher-numbered form. ITR-2 accepts everything ITR-1 accepts plus more. ITR-3 accepts everything ITR-2 accepts plus business income. Filing a more comprehensive form is always safe; filing a simpler form when you have complex income triggers a defective return.
ITR-1 (Sahaj): Who Can and Cannot File It?
ITR-1 is the simplest form, but it has the most restrictions. You can file ITR-1 only if all of the following conditions are met simultaneously:
✅ You CAN file ITR-1 if:
- You are a Resident individual (not HUF, not NRI, not RNOR)
- Total income is ≤ ₹50 lakh
- Income is from: salary/pension + up to 2 house properties (expanded from 1 for AY 2026-27) + other sources (bank interest, FD interest, family pension)
- LTCG under Section 112A is ≤ ₹1.25 lakh with no brought-forward losses (NEW for AY 2026-27)
- Dividend income is ≤ ₹10 lakh
- Agricultural income is ≤ ₹5,000
❌ You CANNOT file ITR-1 if any of these apply:
- You have capital gains beyond ₹1.25L LTCG u/s 112A or any STCG (stock, mutual fund, property, gold, crypto)
- You own more than 2 house properties
- You have foreign income or foreign assets (including foreign bank accounts, foreign stocks)
- You hold unlisted equity shares
- You are a director in any company (even unpaid)
- You have business or professional income
- Your dividend income exceeds ₹10 lakh
- Your agricultural income exceeds ₹5,000
- You are an NRI or RNOR
- You have brought-forward losses to set off
- You want to claim relief under Sec 90/91 (DTAA)
- Your income includes winnings from lottery, horse racing, or games
ITR-1 (Sahaj) for AY 2026-27 is available to Resident individuals with total income up to ₹50 lakh from salary, up to 2 house properties (expanded from 1), and other sources. NEW: LTCG under Section 112A up to ₹1.25 lakh is now allowed in ITR-1, provided there are no brought-forward losses. Any STCG or LTCG beyond ₹1.25 lakh requires ITR-2 at minimum (Income Tax Act, 1961 read with CBDT notification for ITR forms AY 2026-27, dated March 30, 2026).
ITR-2 vs ITR-3 vs ITR-4: How to Choose Between Them
If you don't qualify for ITR-1, the choice between ITR-2, ITR-3, and ITR-4 depends on whether you have business/professional income and whether you opt for presumptive taxation.
| Factor | ITR-2 | ITR-3 | ITR-4 (Sugam) |
|---|---|---|---|
| Business/profession income | ❌ Not allowed | ✅ Required | ✅ Presumptive only |
| Capital gains | ✅ All types | ✅ All types | ❌ Not allowed |
| F&O / intraday trading | ❌ (it is business) | ✅ Yes | ✅ If Sec 44AD applies |
| Foreign income/assets | ✅ Schedule FA | ✅ Schedule FA | ❌ Not allowed |
| More than one house property | ✅ Unlimited | ✅ Unlimited | ❌ Only one |
| Loss carry-forward | ✅ All losses | ✅ All losses | ❌ Not allowed |
| Income ceiling | No limit | No limit | ₹50 lakh |
| NRI eligible? | ✅ Yes | ✅ Yes | ❌ Residents only |
The hierarchy works upward: ITR-1 → ITR-2 → ITR-3. Each higher-numbered form accepts everything the lower form handles, plus additional income types. ITR-4 is a separate branch for presumptive taxation only. When uncertain, file ITR-2 or ITR-3 — a more comprehensive form is always accepted; a simpler form for complex income is rejected.
ITR Filing Deadlines for AY 2026-27 (FY 2025-26)
| Category | Deadline | Section |
|---|---|---|
| Salaried individuals — ITR-1, ITR-2 (no business income) | July 31, 2026 | Sec 139(1) |
| Business/profession income (non-audit) — ITR-3, ITR-4 | August 31, 2026 | Sec 139(1) |
| Tax audit report submission (Sec 44AB) | September 30, 2026 | Sec 44AB |
| Tax audit cases — ITR filing (turnover > ₹1 Cr / ₹10 Cr*) | October 31, 2026 | Sec 139(1) read with 44AB |
| Transfer pricing cases | November 30, 2026 | Sec 139(1) proviso |
| Revised return (correcting an already-filed return) | March 31, 2027 | Sec 139(5) |
| Belated return (filing after deadline) | December 31, 2026 | Sec 139(4) |
| Updated return (ITR-U for missed income) | March 31, 2031 (48 months from AY end) | Sec 139(8A) |
*₹10 crore threshold applies if the taxpayer's cash receipts and payments are each < 5% of total receipts/payments (digital transaction incentive).
The standard ITR filing deadline for salaried individuals for AY 2026-27 is July 31, 2026. A belated or revised return can be filed until December 31, 2026. After that, only an Updated Return (ITR-U) is possible under Section 139(8A) with additional tax of 25–70% depending on the delay period.
Penalties for Late Filing, Wrong Form & Non-Filing
| Violation | Consequence | Section |
|---|---|---|
| Late filing (after Jul 31, before Dec 31) | ₹5,000 fee (₹1,000 if income ≤ ₹5L) + interest under 234A | Sec 234F |
| Filing after Dec 31, 2026 | Cannot file regular/belated return. Only ITR-U with 25-70% additional tax | Sec 139(4), 139(8A) |
| Wrong ITR form filed | Defective return notice. Must correct in 15 days or return treated as invalid | Sec 139(9) |
| Non-filing despite mandatory requirement | Penalty up to ₹5,000. Prosecution possible for income above ₹5L | Sec 234F, Sec 276CC |
| Late filing — loss of carried-forward losses | Business losses, capital losses, speculative losses cannot be carried forward. Only house property loss survives. | Sec 80, Sec 139(3) |
When Is ITR Filing Mandatory Even If You Have No Tax Liability?
Filing is compulsory under the 7th proviso to Section 139(1) if you meet any of these conditions — even if your total income is below the basic exemption limit:
- Deposits exceeding ₹1 crore in one or more current accounts during the year
- Expenditure of more than ₹2 lakh on foreign travel for yourself or any other person
- Electricity bills exceeding ₹1 lakh during the year
- TDS/TCS deducted exceeds ₹25,000 (₹50,000 for senior citizens aged 60+)
- Deposits in savings bank accounts exceeding ₹50 lakh in aggregate during the year
- Gross receipts from business exceed ₹60 lakh or from profession exceed ₹10 lakh in the preceding year
Even if these thresholds don't apply, filing is recommended to claim TDS refunds, establish a clean financial record for loan/visa applications, and avoid unnecessary scrutiny.
New Tax Regime Is Default — How to Switch to Old Regime
From FY 2023-24 onwards, the new tax regime under Section 115BAC is the default for all taxpayers. If you take no action, you are automatically taxed under the new regime with its lower rates but no deductions.
For Salaried Individuals (ITR-1 / ITR-2, no business income):
- Select the old regime directly inside your ITR return — no separate form is required. You can switch between regimes every year at the time of filing.
- Inform your employer during the year via declaration so TDS is deducted under the chosen regime.
- Note: Form 10-IEA is not applicable to salaried filers without business/profession income.
For Business/Profession Income:
- Once you opt out of the new regime and choose the old regime, the choice is locked for life — you cannot switch back to the new regime in future years (unless you cease to have business income)
- This is a critical decision — model both scenarios using our Income Tax Calculator before deciding
For a detailed comparison, see our Old vs New Tax Regime comparison guide.
Income Tax Act 2025: Key Form Name Changes You Should Know
The Income Tax Act, 2025 came into force on April 1, 2026, replacing the 1961 Act. While the current AY 2026-27 filing (for FY 2025-26 income) is still governed by the old Act, several key forms have been renamed under the new Act. You will encounter these new names from FY 2026-27 filing onwards (in 2027):
| Old Form (Pre-April 2026) | New Form (From April 1, 2026) | Purpose |
|---|---|---|
| Form 16 | Form 130 | TDS certificate for salary income (issued by employer) |
| Form 16A | Form 131 | TDS certificate for non-salary income (bank interest, rent, etc.) |
| Form 26AS | Form 168 | Annual tax credit statement (TDS/TCS credits, advance tax paid) |
| Form 12BB | Form 124 | Declaration for salary deductions (HRA, LTA, 80C, home loan) |
| Form 10-IE | Form 10-IEA | Opt-out form for new tax regime (business/profession income) |
| Form 10B / 10BB | Form 112 | Audit report for trusts and charitable institutions |
✅ Current Filing (AY 2026-27)
You will still receive Form 16 from your employer and see Form 26AS on the portal. The old names apply for FY 2025-26 income.
🔄 Next Year Filing (Tax Year 2026-27)
From FY 2026-27 onwards, expect Form 130 instead of Form 16, and Form 168 instead of Form 26AS. The e-filing portal will transition to the new names.
Under the Income Tax Act, 2025 (effective April 1, 2026), Form 16 is now Form 130, Form 26AS is now Form 168, and Form 16A is now Form 131. These new names apply from Tax Year 2026-27 onwards. For the current AY 2026-27 filing (FY 2025-26 income), the old form names under the 1961 Act continue to be used.
Documents Required for ITR Filing — Checklist
📋 Essential for All
- • PAN card
- • Aadhaar card (linked to PAN)
- • Form 16 (from employer) — will be called Form 130 from FY 2026-27
- • Form 26AS / AIS / TIS — Form 26AS will be called Form 168 from FY 2026-27
- • Bank statements (all accounts)
- • Interest certificates (FD, savings account)
📈 If You Have Investments
- • Capital gains statement (broker / MF platform)
- • Dividend income details
- • Crypto/VDA transaction records
- • Property sale/purchase deeds
- • ESOP exercise details
🏠 Deductions (Old Regime)
- • 80C: PPF, ELSS, LIC, EPF, NSC receipts
- • 80D: Health insurance premium receipts
- • 24(b): Home loan interest certificate
- • 80E: Education loan interest
- • HRA: Rent receipts + landlord PAN (if rent > ₹1L/yr)
- • 80CCD(1B): NPS contribution proof
💼 If Self-Employed / Business
- • Profit & Loss account
- • Balance Sheet
- • GST returns (if registered)
- • Advance tax challan receipts
- • Tax audit report (if applicable)
Form 26AS vs AIS vs TIS: What to Check Before Filing
Note: Form 26AS will be renamed to Form 168 under the Income Tax Act, 2025 from FY 2026-27 onwards.
Before filing your ITR, always reconcile your income with these three reports. Mismatches between your filed income and these statements are the #1 trigger for income tax notices.
| Report | What It Contains | Where to Access |
|---|---|---|
| Form 26AS | TDS/TCS credits, advance/self-assessment tax paid, high-value transactions, refunds | e-Filing portal → e-File → View Form 26AS |
| AIS (Annual Information Statement) | Comprehensive: salary, interest, dividends, stock transactions, MF purchases/redemptions, property, foreign remittances | e-Filing portal → Services → AIS |
| TIS (Taxpayer Information Summary) | Aggregated and categorised view of AIS data by income type — useful for cross-checking | e-Filing portal → Services → AIS (TIS tab) |
If any entry in AIS is incorrect, you can submit feedback directly on the portal to flag it. However, you must still report the correct income in your ITR — the feedback mechanism doesn't change your filing obligation.
Calculate Your Tax Before Filing
Compare old vs new regime, see your exact tax liability, and find the right ITR form — all in one calculator.
Open Income Tax CalculatorFrequently Asked Questions
Which ITR form should a salaried person file in 2026?
Most salaried individuals with income up to ₹50 lakh from salary, up to 2 house properties, and other sources (interest, dividends up to ₹10 lakh, agricultural income up to ₹5,000) should file ITR-1 (Sahaj). NEW for AY 2026-27: ITR-1 also allows LTCG under Section 112A (listed equity/equity mutual funds) up to ₹1.25 lakh, with no brought-forward losses. You must file ITR-2 if you have STCG, non-112A capital gains (property/gold/debt funds), 112A LTCG above ₹1.25 lakh, brought-forward capital losses, foreign income/assets, or total income above ₹50 lakh. If you also have business or professional income, file ITR-3.
What is the ITR filing deadline for AY 2026-27?
For salaried individuals and non-audit taxpayers, the due date is July 31, 2026 for AY 2026-27 (FY 2025-26 income). For taxpayers requiring a tax audit (business turnover > ₹1 crore), the deadline is October 31, 2026. For transfer pricing cases, it is November 30, 2026. A belated return can be filed until December 31, 2026 with a penalty.
Can I file ITR-1 if I have capital gains from stocks or mutual funds?
For AY 2026-27, ITR-1 now allows LTCG under Section 112A (listed equity/equity mutual funds) up to ₹1.25 lakh, provided you have no brought-forward losses. However, if you have any STCG, LTCG from property/gold/debt funds, LTCG beyond ₹1.25 lakh, or brought-forward capital losses, you must file ITR-2 (or ITR-3 if you also have business income). Most active stock/MF investors will still need ITR-2.
What is the penalty for filing ITR after the due date?
Under Section 234F, the late filing fee is ₹5,000 if filed after July 31 but before December 31, 2026. If total income is up to ₹5 lakh, the maximum penalty is ₹1,000. After December 31, 2026, you cannot file a return for AY 2026-27 at all (updated return under Section 139(8A) is the only option, with additional tax of 25-50%). You also lose the ability to carry forward losses (except house property loss) and interest under Sections 234A is charged.
Which ITR form do I file for F&O (Futures & Options) trading?
F&O trading is treated as business income (non-speculative), so you must file ITR-3. If your F&O turnover is below ₹3 crore and you opt for presumptive taxation under Section 44AD, you can file ITR-4 (Sugam). However, if you have any losses from F&O that you want to carry forward, you must file ITR-3 — ITR-4 does not allow loss carry-forward.
Which ITR form should a freelancer or consultant file?
Freelancers and professionals (doctors, lawyers, architects, CAs, etc.) with gross receipts up to ₹75 lakh who opt for presumptive taxation under Section 44ADA should file ITR-4 (Sugam). If receipts exceed ₹75 lakh, or if you don't opt for presumptive taxation, or if you want to claim actual expenses, file ITR-3.
What happens if I file the wrong ITR form?
If you file the wrong ITR form, the Income Tax Department may treat it as a defective return under Section 139(9). You will receive a notice asking you to rectify the defect within 15 days (extendable). If not corrected, the return is treated as if it was never filed — meaning late filing penalties apply, and you may lose the ability to carry forward losses. You can file a revised return under Section 139(5) to correct the form.
Do I need to file ITR if my income is below the taxable limit?
Filing is mandatory regardless of tax liability if: (a) you deposited more than ₹1 crore in current accounts, (b) spent more than ₹2 lakh on foreign travel, (c) paid electricity bills exceeding ₹1 lakh, (d) your TDS/TCS exceeds ₹25,000 (₹50,000 for senior citizens), or (e) your total deposits in savings accounts exceed ₹50 lakh. Even below these thresholds, filing is recommended to claim TDS refunds and build a financial trail.
Which ITR form is for NRIs?
NRIs cannot file ITR-1 or ITR-4 — these forms are only for Resident individuals. NRIs must file ITR-2 (for salary, capital gains, house property, other income) or ITR-3 (if they also have business/profession income in India). RNOR (Resident but Not Ordinarily Resident) taxpayers also cannot use ITR-1.
Can I file ITR-1 if I have dividend income above ₹10 lakh?
No. ITR-1 is only for individuals with dividend income up to ₹10 lakh from domestic companies. If your total dividend income exceeds ₹10 lakh, you must file ITR-2. Note that all dividends are taxable at your slab rate since the abolition of DDT in 2020.
What is an Updated Return (ITR-U) and when can I file it?
An Updated Return under Section 139(8A) can be filed within 48 months from the end of the relevant assessment year to declare additional income that was missed. You must pay additional tax of 25% (if filed within 12 months of AY end), 50% (12-24 months), 60% (24-36 months), or 70% (36-48 months) on the additional tax liability. You cannot file an ITR-U to reduce income or claim/increase a refund.
Which ITR form should a director of a company file?
A director of a company must file ITR-2 at minimum (not ITR-1 or ITR-4). If the director also has business or professional income, ITR-3 is required. This applies even if the directorship is unpaid — holding the position of director itself disqualifies you from ITR-1.
Which ITR form do I use if I have both salary and rental income from multiple properties?
If you have salary income and rental income from more than one house property, you must file ITR-2. ITR-1 allows only one house property. If you additionally have business income, use ITR-3.
Is the new tax regime the default for FY 2025-26 filing?
Yes. The new tax regime under Section 115BAC is the default from FY 2023-24. Salaried individuals (ITR-1/ITR-2 filers without business income) simply select the old regime inside their ITR return — no separate form is required. They can switch between regimes every year. For taxpayers with business or profession income (ITR-3/ITR-4 filers), opting out of the new regime requires filing Form 10-IEA before the return due date, and once opted out the choice is locked unless the business ceases.
Related Calculators & Resources
Sources & References
- CBDT Notification for ITR Forms AY 2026-27 — Official Income Tax Department Portal
Disclaimer
This article is for informational purposes only and is based on the Income Tax Act, 1961 and CBDT notifications for AY 2026-27. ITR form eligibility rules may change via CBDT notifications. Always verify the applicable ITR form using the income tax e-filing portal or consult a qualified Chartered Accountant before filing. This website is not affiliated with or endorsed by the Income Tax Department or the Government of India.