Income Tax Return Filing (ITR-1 to ITR-7)
Income Tax Return Filing (ITR-1 to ITR-7)
( ITR 1 2 3 4 5 6 Meaning Explained: Which ITR Form Should You File? )
During tax season in India, one of the most common questions is about the meaning and purpose of ITR forms 1 to 7. Every taxpayer—whether salaried, self-employed, a business professional, or part of a firm—is required to file an Income Tax Return (ITR) that matches their income type and financial situation. To make this process easier, the Income Tax Department has categorized taxpayers under different ITR forms, from ITR-1 to ITR-7. Each form is tailored to specific income sources and taxpayer profiles. In this guide, we’ll explain the purpose, eligibility, and use of each ITR form to help you select the correct one for the Financial Year 2024-25 (Assessment Year 2025-26).
What is ITR?
An Income Tax Return (ITR) is a form used by taxpayers to report their income, claim deductions, and disclose taxes paid over a financial year. The Central Board of Direct Taxes (CBDT) provides different ITR forms based on the nature of income and the type of taxpayer. Selecting the appropriate form is essential to ensure correct and hassle-free tax filing.
How to Know Which ITR Form to File?
- Your income source (salary, capital gains, business, etc.)
- Your residential status
- Whether you’re an individual, firm, or company
- Any foreign income or assets
- Whether you opt for presumptive taxation
Understanding Each ITR Form: Detailed Breakdown
Now that you’re familiar with the meanings of ITR Forms 1 through 6, let’s take a closer look at each one to help you determine which best fits your financial situation. We’ll begin with ITR-1 (Sahaj)—the most widely used form by salaried individuals with straightforward income sources.
ITR-1 Meaning
ITR-1 (Sahaj) is meant for resident individuals with simple and limited sources of income. For the Assessment Year 2025–26 (related to Financial Year 2024–25), this form can be used if your total income falls under any of the following categories:
- Salary or Pension
- One House Property (provided no loss is carried forward from previous years)
- Other Sources of Income (excluding income from lottery winnings or horse races)
- Agricultural income up to ₹5,000
Who Should Not Use ITR-1?
You are not eligible to file ITR-1 if:
- Your total income exceeds ₹50 lakh
- Agricultural income exceeds ₹5,000
- You have taxable capital gains
- You earn income from a business or profession
- You own more than one house property
- You are a Director in a company
- You’ve invested in unlisted equity shares
- You own foreign assets or have a foreign bank account
- You are a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR)
- You have foreign income
- You are assessable for someone else’s income (where tax is deducted in their name)
- Tax has been deducted under Section 194N
- You’ve deferred tax payment on Employee Stock Ownership Plans (ESOPs)
- You have any brought forward losses or need to carry forward losses
ITR-2 Meaning
After understanding the purpose of ITR-1, let’s move on to ITR-2. This form is meant for individuals and Hindu Undivided Families (HUFs) with income from multiple sources, excluding income from business or professional activities. Applicable for Assessment Year 2025–26 (covering Financial Year 2024–25), ITR-2 is suitable if your income includes:
- Salary or Pension
- Income from Multiple House Properties
- Capital Gains (short-term and long-term)
- Income from Other Sources, including winnings from lotteries, racehorses, and other legal gambling activities
- Foreign Assets or Foreign Income
- Agricultural Income exceeding ₹5,000
- Directorship in a Company
- Investments in Unlisted Equity Shares
- Being a Resident Not Ordinarily Resident (RNOR) or Non-Resident
Who Should Not Use ITR-2?
You are not eligible to file ITR-2 if:
- You have income from the profits and gains of a business or profession. In such cases, consider using ITR-3 or ITR-4, depending on your specific circumstances.
ITR-3 Meaning
ITR-3 is intended for individuals and Hindu Undivided Families (HUFs) who earn income from a proprietary business or profession not covered under the presumptive taxation scheme (i.e., Sections 44AD, 44ADA, or 44AE).
If you are engaged in a business or profession and are required to maintain books of accounts or undergo a tax audit, this is the appropriate return form for you.
Who Should File ITR-3?
You are eligible to file ITR-3 if you have income from:
- A business or profession that is not under presumptive taxation
- Business or professional income requiring the maintenance of books of accounts and/or tax audit
- Investments in unlisted equity shares during the financial year
- Being a partner in a firm, earning a salary, remuneration, interest, etc.
- Other sources of income include:
- Salary or pension
- Income from house property
- Interest or dividend income
ITR-4 or Sugam: For Presumptive Income Taxpayers
Next in our breakdown of ITR forms is ITR-4, also known as Sugam. This form is mainly for resident individuals, Hindu Undivided Families (HUFs), and Partnership Firms (excluding LLPs) who choose to file taxes under the presumptive income scheme.
You can file ITR-4 if your total income for AY 2025–26 includes any of the following:
- Business income under Section 44AD or 44AE (presumptive basis)
- Professional income under Section 44ADA
- Salary or pension income up to ₹50 lakh
- Income from one house property (with total income not exceeding ₹50 lakh and no loss carry forward)
- Income from other sources, not exceeding ₹50 lakh (excluding lottery or racehorse winnings)
ITR-5 Meaning
ITR-5 is meant for a range of entities, including firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), Artificial Juridical Persons (AJPs), as well as estates of deceased or insolvent individuals, business trusts, and investment funds.
ITR 6 Meaning
ITR-6 is the prescribed Income Tax Return form for companies that do not claim exemption under Section 11 of the Income Tax Act. It applies to companies whose income is not derived from property held for charitable or religious purposes. Filing ITR-6 is mandatory through electronic mode only, and it must be submitted using a digital signature.
ITR 7
ITR-7 is the designated Income Tax Return form for entities, including companies, obligated to file returns under specific sections of the Income Tax Act:
- Section 139(4A): Applicable to individuals receiving income from property held under trust or other legal obligations, either wholly or partially, for charitable or religious purposes.
- Section 139(4B): Pertains to political parties required to file a return if their total income, before claiming exemptions under Section 139A, exceeds the maximum amount not chargeable to income tax.
- Section 139(4C): Includes entities such as:
- Scientific research associations
- News agencies
- Associations or institutions referred to in Section 10(23A)
- Institutions referred to in Section 10(23B)
- Funds, universities, educational institutions, hospitals, or other medical institutions
- Section 139(4D): Mandates filing by universities, colleges, or other institutions that are not required to furnish a return of income or loss under any other provision of this section.
- Section 139(4E): Requires business trusts, which are not mandated to furnish a return of income or loss under any other provisions of this section, to file returns.
- Section 139(4F): Pertains to investment funds referred to in Section 115UB, which are not obligated to furnish a return of income or loss under any other provisions of this section.