Which ITR Form Should You File for AY 2026-27?
The ITR form you file is decided by your sources of income, not by your profession or your gut. Pick the wrong one and the return is treated as defective, which delays your refund and can trigger a notice. For AY 2026-27 (financial year 2025-26), the rule of thumb is short: salary and simple income go to ITR-1, capital gains push you to ITR-2, any business or professional income lands you in ITR-3, and presumptive taxpayers use ITR-4.
This is a decision guide organised by what your money comes from. Follow the logic, use the selector table, and watch the one trap that catches the most people: a single capital-gains redemption can disqualify ITR-1.
The Decision Path
There are seven ITR forms in total, but individuals and HUFs almost always land in one of four: ITR-1, ITR-2, ITR-3 or ITR-4. Work down this logic in order and stop at the first form that fits.
Step-by-Step Guide
Which ITR Form? Work Down in Order
Do you have business or professional income?
If yes and you are not using presumptive taxation, file ITR-3. If yes and you opt for presumptive taxation under 44AD, 44ADA or 44AE, file ITR-4. F&O and intraday trading count as business income and require ITR-3.
Business firstDo you have capital gains beyond the small limit?
Any capital gains transaction beyond ITR-1's narrow 112A allowance pushes you to ITR-2. Sold property, gold, unlisted shares, or booked more than ₹1,25,000 of listed-equity LTCG? That means ITR-2.
Gains nextAny foreign asset, directorship, or unlisted share?
Foreign income or assets, being a company director, holding unlisted shares, or total income above ₹50 lakh all require ITR-2 (or ITR-3 if business income also exists).
Complexity checkOtherwise: simple resident income?
Resident, total income up to ₹50 lakh, income only from salary or pension, up to two house properties, and other sources. That is ITR-1 (Sahaj).
Default simple caseSource: CBDT ITR form applicability rules, AY 2026-27
Selector Table: Income Situation to Form
| Your income situation | Correct form |
|---|---|
| Salary or pension only, resident, income up to ₹50L, up to two house properties | ITR-1 (Sahaj) |
| Above plus listed-equity LTCG up to ₹1,25,000 with no brought-forward losses | ITR-1 (Sahaj), newly allowed for AY 2026-27 |
| Capital gains beyond the ₹1,25,000 112A limit, or property/gold/unlisted-share sale | ITR-2 |
| More than two house properties | ITR-2 |
| Foreign income or foreign assets | ITR-2 |
| Company director or holder of unlisted shares | ITR-2 |
| Total income above ₹50 lakh (no business income) | ITR-2 |
| Business or professional income (regular books), including F&O and intraday | ITR-3 |
| Salary plus house property plus capital gains plus business, all together | ITR-3 |
| Partner drawing remuneration or interest from a firm | ITR-3 |
| Presumptive business under 44AD (turnover up to ₹2cr, or ₹3cr on digital receipts) | ITR-4 (Sugam) |
| Presumptive profession under 44ADA (gross receipts up to ₹75L, 50% declared) | ITR-4 (Sugam) |
| Presumptive goods carriage under 44AE | ITR-4 (Sugam) |
| Non-resident individual | Not ITR-1 or ITR-4, use ITR-2 or ITR-3 |
ITR-1 (Sahaj): The Simple Case, With One New Door
ITR-1 is for the resident individual with straightforward income. To qualify, all of the following must hold:
- Total income does not exceed ₹50,00,000.
- Income comes from salary or pension, one or two house properties, and other sources such as interest or family pension.
- Agricultural income does not exceed ₹5,000.
New for AY 2026-27: Limited LTCG Now Allowed in ITR-1
Previously any capital gain forced you off ITR-1. From AY 2026-27, ITR-1 accommodates long-term capital gains under Section 112A (listed equity shares and equity mutual funds) up to ₹1,25,000, provided you have no brought-forward losses to set off or carry forward. This is a genuine simplification for small retail investors who only have modest equity gains.
This allowance is narrow and easy to breach. The moment your listed-equity LTCG crosses ₹1,25,000, or you have any short-term capital gain, any debt or property or gold gain, or any loss to carry forward, ITR-1 is off the table and you move to ITR-2. A single mutual fund redemption slightly above the limit disqualifies the whole form.
Who Cannot Use ITR-1
- Capital gains beyond the ₹1,25,000 Section 112A allowance
- Any business or professional income
- Director in a company, or holder of unlisted equity shares
- Foreign assets, foreign income, or signing authority abroad
- Non-resident status
For the wider set of AY 2026-27 changes to ITR-1, including the two-house-property rule, see which ITR form for AY 2026-27, key changes.
ITR-2: Capital Gains and Complexity, No Business
ITR-2 is for individuals and HUFs who have no income from business or profession but whose affairs are more involved than ITR-1 allows. Use ITR-2 if any of these apply:
- Capital gains of any amount beyond ITR-1's small 112A limit, whether from listed shares, property, gold, unlisted shares or debt instruments
- More than two house properties
- Foreign income or foreign assets
- You are a director of a company
- You hold unlisted equity shares
- Total income exceeds ₹50 lakh
The defining line is this: any capital gains transaction beyond the small 112A allowance pushes you from ITR-1 to ITR-2. If you sold a flat, redeemed debt funds, or booked short-term equity gains, ITR-2 is your form. See capital gains tax in India, LTCG and STCG for AY 2026-27 for how those gains are actually taxed.
ITR-3: Any Business or Professional Income
ITR-3 is the form for individuals and HUFs with income from business or profession that is not declared under the presumptive scheme. It is the most comprehensive individual form because it accommodates everything at once: salary, house property, capital gains and business income together on a single return.
Use ITR-3 if you have:
- Income from a business or profession with regular books of account
- Futures and options (F&O) or intraday trading, which are treated as business income
- Partner's remuneration or interest income from a partnership firm
- A mix of salary plus capital gains plus business income
If even a part of your income is business or professional and you are not on the presumptive scheme, ITR-3 is mandatory, regardless of how simple the rest of your income is.
ITR-4 (Sugam): The Presumptive Route
ITR-4 is for a resident individual, HUF, or firm other than an LLP that opts for presumptive taxation and whose total income does not exceed ₹50 lakh. The presumptive schemes are:
- Section 44AD, business, turnover up to ₹2 crore, or up to ₹3 crore where the prescribed digital-receipts condition is met
- Section 44ADA, professionals, gross receipts up to ₹75,00,000, with income declared at 50% of receipts
- Section 44AE, income from plying or hiring goods carriages
Non-residents cannot use ITR-1 or ITR-4. A non-resident with business income files ITR-3, and one with investment or capital-gains income files ITR-2. Presumptive taxation under ITR-4 is a resident-only benefit.
The same disqualifiers that apply to ITR-1 apply here: capital gains beyond the small limit, foreign assets, directorship, or unlisted shares all push a presumptive taxpayer up to ITR-3. For the full family of forms including ITR-5, 6 and 7, see types of ITR filing in India.
Due Dates for FY 2025-26
Filing the right form on time matters as much as filing it at all. For FY 2025-26 (AY 2026-27):
Deadline Timeline
ITR Due Dates, FY 2025-26 (AY 2026-27)
Non-audit individual returns
ITR-1, ITR-2, and non-audit ITR-3 and ITR-4 for individuals not requiring a tax audit
Audit cases
Taxpayers whose accounts require a tax audit under the Income Tax Act
Transfer pricing cases
Taxpayers with specified international or domestic transactions requiring a transfer pricing report
Source: Income Tax Act 1961, due-date provisions for AY 2026-27
To be clear: the standard non-audit due date for individual returns is 31 July 2026. Only where a tax audit or transfer pricing report is required do the later dates apply.
Common Form-Selection Mistakes
- Using ITR-1 after a capital-gains redemption. The single most frequent error. Any equity, debt, gold or property sale beyond the narrow 112A allowance invalidates ITR-1. The return comes back marked defective.
- Treating F&O as capital gains. Futures and options and intraday trading are business income, not capital gains. They require ITR-3, not ITR-2.
- Filing ITR-1 as a company director or unlisted-share holder. Directorship or unlisted shares, however nominal, rule out ITR-1 and ITR-4 completely.
- A non-resident using ITR-1 or ITR-4. Both forms are barred for non-residents. Use ITR-2 or ITR-3 depending on whether business income exists.
- Staying on ITR-4 after crossing the presumptive limits. Exceed the turnover or receipts ceilings and you must file ITR-3 with proper books.
Frequently Asked Questions
Which ITR form do I file for AY 2026-27 if I only have salary?
If you are a resident with total income up to ₹50 lakh, income only from salary or pension, up to two house properties and other sources such as interest, you file ITR-1 (Sahaj). For AY 2026-27 you can also stay on ITR-1 with listed-equity LTCG up to ₹1,25,000, provided you have no brought-forward losses.
Can I file ITR-1 if I sold some mutual funds?
Only if the gain is listed-equity long-term capital gain under Section 112A up to ₹1,25,000 and you have no losses to carry forward. Any short-term gain, any debt or property gain, or LTCG above ₹1,25,000 means you must file ITR-2 instead.
Which ITR form is for F&O or intraday trading?
ITR-3. Futures and options and intraday trading are treated as business income, not capital gains, so they require ITR-3 even if your other income is only salary.
What is the difference between ITR-2 and ITR-3?
ITR-2 is for individuals and HUFs with capital gains or other complexity but no business or professional income. ITR-3 is for anyone with business or professional income, and it can also hold salary, house property and capital gains on the same return.
Who can use the presumptive ITR-4 form?
A resident individual, HUF or firm (other than an LLP) with total income up to ₹50 lakh opting for presumptive taxation under Section 44AD (business), 44ADA (professionals, receipts up to ₹75 lakh) or 44AE (goods carriage). Non-residents cannot use ITR-4.
When is the ITR due date for FY 2025-26?
For non-audit individual returns, including ITR-1, ITR-2 and non-audit ITR-3 and ITR-4, the due date is 31 July 2026. Audit cases are due 31 October 2026, and transfer pricing cases 30 November 2026.
What happens if I file the wrong ITR form?
The return can be treated as defective, which delays your refund and may trigger a notice asking you to refile under the correct form within a limited window. Selecting the right form up front avoids the rework and the delay.
Sources: Income Tax Act 1961, including Sections 44AD, 44ADA, 44AE and 112A, and the ITR form applicability rules and instructions notified by the Central Board of Direct Taxes for AY 2026-27, along with the statutory due-date provisions for financial year 2025-26. Verified against the ITR forms and utilities released for AY 2026-27. For a form recommendation on your specific income mix, consult a Chartered Accountant.