+91 96258 93100 contact@taxgyani.com Mon–Sat 9AM–7PM
WhatsApp
Tax Gyani Logo
Free Consultation
ITR Filing · Income Tax·TaxGyani Expert Guide

ITR-1 vs ITR-2 vs ITR-3: Which Form Should You File in 2026?

Eligibility criteria, income types covered, and a quick decision matrix to help you choose the correct ITR form for AY 2026-27.

✍️ CA Sunita Nair
📅 05 March 2026
⏱ 7 min read
🇮🇳 India
In this article
  1. Overview
  2. ITR-1 (Sahaj) — Salaried
  3. ITR-2 — Capital Gains & NRI
  4. ITR-3 — Business & Profession
  5. FAQs

Understanding ITR Forms — Overview

The Income Tax Department prescribes different ITR forms based on the type of income, the nature of the taxpayer, and the quantum of income. Filing the wrong form can result in a defective return notice. This guide helps you pick the right one for AY 2026-27.

Key rule for AY 2026-27: The New Tax Regime is the default. If you want to opt for the Old Regime, you must explicitly select it in your ITR — the choice applies to the form you file as well as the tax computation.

ITR-1 (Sahaj) — Who Can File?

ITR-1 is the simplest form, designed for resident individuals with straightforward income:

✓ Salary or pension income
✓ Income from one house property (excluding brought forward losses)
✓ Other sources: interest, dividends (up to ₹5,000 from co-operative society)
✗ Total income must NOT exceed ₹50 lakh
✗ Cannot be used by NRIs, HUFs, or those with capital gains
✗ Cannot be used if you are a director in a company or hold unlisted shares

ITR-2 — Who Should File?

ITR-2 is for individuals and HUFs who cannot file ITR-1:

✓ Capital gains — from shares, mutual funds, property, bonds
✓ Income from more than one house property
✓ Foreign income or assets (NRIs, foreign assets)
✓ Total income exceeding ₹50 lakh
✓ Director of a company or holder of unlisted equity shares
✗ Cannot be used if you have income from business or profession

ITR-3 — For Business & Profession

ITR-3 is for individuals and HUFs with income from business or profession:

✓ Proprietorship business income
✓ Professional income (doctors, lawyers, consultants, CAs)
✓ Income from a partnership firm (as a partner)
✓ Also includes salary, capital gains, house property income
✗ If business income is under ₹2 crore and you opt for presumptive taxation, use ITR-4 instead
FeatureITR-1ITR-2ITR-3
Salaried income✓✓✓
Capital gains✗✓✓
Business income✗✗✓
NRI✗✓✓
Income > ₹50L✗✓✓
Foreign assets✗✓✓

Frequently Asked Questions

Can a salaried person with stock market gains file ITR-1?
+
No. If you have capital gains from shares or mutual funds (STCG/LTCG), you must file ITR-2, not ITR-1, regardless of the amount.
I am a freelancer — which ITR form should I use?
+
Freelancers and consultants with professional income must file ITR-3 (or ITR-4 if opting for presumptive taxation under Section 44ADA with income below ₹75 lakh).
What is the due date for ITR filing for AY 2026-27?
+
For individuals not subject to audit, the due date is 31st July 2026. For taxpayers under audit, it is 31st October 2026. Late filing attracts a penalty of ₹5,000 (₹1,000 if income is below ₹5 lakh).
Can I switch ITR forms after filing?
+
You can file a revised return if you discover you filed the wrong form, provided the original return was filed before the due date. The revised return must be filed before 31st December 2026.