Income Tax Return (ITR) filing is a critical annual obligation for individuals and businesses in India. Selecting the correct ITR form ensures compliance, avoids penalties, and facilitates smooth tax assessments. With the Assessment Year 2025–26 underway, this guide aims to simplify the complexities of ITR forms and help you determine the right form for your situation.
Whether you’re a salaried employee, freelancer, business owner, or managing a trust or institution, identifying the correct ITR form is the foundation of proper tax filing.
What is an ITR Form?
An ITR (Income Tax Return) form is a format prescribed by the Income Tax Department of India to help taxpayers report their income, deductions, and taxes paid during the financial year. Each ITR form is aligned to specific income sources and taxpayer categories—whether individual, HUF, firm, company, or trust.
Filing an incorrect form can lead to the return being treated as defective, causing delays or penalties.
Types of ITR Forms: Quick Overview (AY 2025–26)
Here is a summary of the seven ITR forms applicable for Financial Year 2024–25:
| ITR Form | Applicable To | Income Types |
| ITR 1 (Sahaj) | Resident Individuals (income ≤ ₹50 lakh) | Salary, pension, one house property, other income |
| ITR 2 | Individuals/HUFs (no business income) | Salary, capital gains, multiple house properties, foreign income |
| ITR 3 | Individuals/HUFs with business/profession income | Business income, partnership income, capital gains |
| ITR 4 (Sugam) | Individuals/HUFs/firms under presumptive taxation | Income under Sections 44AD, 44ADA, 44AE |
| ITR 5 | Firms, LLPs, AOPs, BOIs | Business income, other income |
| ITR 6 | Companies (excluding Section 11 exemptions) | All company income |
| ITR 7 | Charitable trusts, political parties, institutions | Returns under Sections 139(4A) to 139(4F) |
Detailed Analysis of Each ITR Form
ITR 1 (Sahaj) – For Simplicity Seekers
It’s for Resident individuals (not HUF) with total income up to ₹50 lakh.
Can also be filed by individuals having agricultural income up to ₹5,000.
Income must be from:
Salary or pension.
One house property.
Income from other sources (e.g., interest)
Not applicable if you:
Have capital gains.
Own foreign assets or earn foreign income.
Are a director in a company.
Ideal for: Salaried employees and pensioners with no additional sources of income.
ITR 2 – For Investors & Property Owners
For Individuals or HUFs not having income from business/profession
Applicable if your income includes:
Salary/pension.
Capital gains (sale of shares, property, etc.)
More than one house property.
Foreign assets or foreign income.
Ideal for: High-net-worth individuals (HNIs), NRIs, property owners, and investors.
ITR 3 – For Business Owners and Professionals
For those earning income from:
Proprietorship businesses.
Freelance or consulting services.
Income as a partner in a firm.
Capital gains, dividends, and more.
Requires detailed profit and loss accounts, balance sheet, and audit (if applicable).
Ideal for: Business owners, professionals like doctors, consultants, freelancers.
ITR 4 (Sugam) – For Presumptive Income Taxpayers
For resident individuals, HUFs, and firms (other than LLPs) opting for:
Section 44AD – For Small businesses
– Threshold: ₹2 crores if cash receipts exceed 5% of total gross receipts
– ₹3 crores if cash receipts do not exceed 5% of total gross receipts
Section 44ADA – for professionals (like, doctors, lawyers, architects)
– Threshold: ₹50 lakhs if cash receipts exceed 5% of total gross receipts
– ₹75 lakhs if cash receipts do not exceed 5% of total gross receipts
Section 44AE – for those engaged in the business of plying, hiring, or leasing goods carriages. It’s a simple form with fewer reporting requirements under the presumptive taxation scheme.
Not applicable if:
Income exceeds thresholds.
You own foreign assets.
You are a director in a company.
Ideal for: Small business owners, shopkeepers, freelancers, and transport operators.
ITR 5 – For Firms, LLPs, AOPs, BOIs
Applicable to entities except individuals, HUFs, companies, and those filing ITR 7.
Covers business income, capital gains, and more.
Ideal for: LLPs, traditional partnership firms, and joint ventures.
ITR 6 – For Companies
For Companies not claiming exemption under Section 11 (charitable/religious trust income)
Mandatory online filing with digital signature.
Must include MAT (Minimum Alternate Tax) details if applicable.
Ideal for: Private limited companies and other corporate entities.
ITR 7 – For Charitable Trusts, Political Parties, Institutions
For entities claiming exemption under:
Section 139(4A) – Charitable/religious trusts
Section 139(4B) – Political parties
Section 139(4C) – Educational institutions, hospitals
Section 139(4D) – Research bodies, universities
Ideal for: NGOs, trusts, societies, and political entities.
Income Tax Slabs for FY 2024–25 (AY 2025–26)
When filing your ITR for the financial year 2024–25, it’s important to choose between the Old Tax Regime and the New Tax Regime. Each has its own slab rates and implications based on income level and eligible deductions.
Old Tax Regime (with Deductions)
The old regime allows taxpayers to claim various exemptions and deductions such as:
₹1.5 lakh under Section 80C (e.g., PPF, ELSS, LIC)
HRA, LTA, standard deduction, interest on home loans, etc.
SLABS FOR INDIVIDUALS/HUF (Upto 60 years)
| Income Range | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
For senior citizens (Age: 60-80) – Upto 3 lakhs exempted.
For super senior citizen (Age: Above 80) – Upto 5 lakhs exempted.
New Tax Regime (Fewer Deductions, Lower Rates)
The new tax regime features lower tax rates but limits most deductions and exemptions. It offers a simpler filing process and may be advantageous for individuals with few investments or minimal eligible deductions.
SLABS FOR INDIVIDUALS/HUF
| Income Range | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Which Tax Regime Should You Choose?
The old regime is beneficial if you claim multiple deductions (like 80C, 80D, home loan interest, etc.).
The new regime may be better for salaried individuals who don’t invest much or want simplified filing.
Tip: The government now considers the new tax regime as the default, but taxpayers can opt for the old regime when filing.
Deadlines for ITR Filing (AY 2025–26)
For individuals & HUFs (non-audit): 31st July 2025
For audit cases: 31st October 2025
For transfer pricing cases: 30th November 2025
Late filing attracts interest under Sections 234A/B/C and a penalty under Section 234F.
Documents Checklist for Filing ITR
PAN & Aadhaar.
Form 16 / Salary Slips.
TDS Certificates (Form 16A/16C)
Bank Statements.
Capital Gains Statements (if any)
Interest Certificates (FDs, savings)
Proofs for deductions (80C, 80D, etc.)
Form 26AS & AIS.
Who Should File ITR Even If Not Mandated?
Income below taxable limit but:
Want to claim TDS refund.
Need proof of income (e.g. for loans/visas)
Carry forward capital losses.
To declare foreign assets or income.
Common Mistakes to Avoid While Filing ITR
Choosing the wrong ITR form.
Failing to report income from all sources (e.g., bank interest)
Ignoring Form 26AS and AIS (Annual Information Statement)
Not verifying the return after submission.
Filing after the due date without valid reason.
Filing the Right ITR Form Matters
Choosing the correct ITR form leads to quicker processing, minimizes the chances of receiving notices, and offers greater peace of mind. Accurate filing also helps streamline processes like loan approvals, visa applications, and refund settlements.
At PGA & Co., we’ve helped hundreds of individuals and businesses navigate tax season with clarity and compliance. Whether you’re a salaried employee or running a business, staying updated and filing the correct ITR form can make all the difference.
As the ITR deadline approaches, we encourage you to prepare early, gather the right documents, and seek expert advice if needed. If you’re unsure which form applies to you or want a review before filing, our team is ready to assist with precision and confidentiality.
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