Which ITR Form Should You File for AY 2026-27? A Guide for Individuals and Businesses
Which ITR Form Should You File for AY 2026-27? A Guide for Individuals and Businesses
Filing your income tax return starts with one question: which ITR form applies to you? Using the wrong form means your return is defective. You get a defective return notice and may have to refile.
ITR-1 (Sahaj): Resident individuals only. Total income up to Rs 50 lakh. Income only from salary, one house property, and other sources (interest, dividends). Agricultural income up to Rs 5,000. Cannot be used by anyone with capital gains, income from more than one house, company directors, or persons holding unlisted equity shares.
ITR-2: Individuals and HUFs with capital gains (shares, mutual funds, property, crypto), income from more than one house property, foreign income, or who are company directors. For AY 2026-27, Schedule CG in ITR-2 has separate sections for pre and post 23 July 2024 transactions (Finance Act 2024 rate changes). LTCG above Rs 1.25 lakh at 12.5%, STCG at 20%.
ITR-3: Individuals or HUFs with income from a business or profession. Partners in partnership firms. Anyone with both business income and capital gains. Most freelancers, consultants, shop owners, doctors, lawyers, and architects with registered practices file ITR-3. Also required if you opt for Section 44AD/44ADA but have capital gains.
ITR-4 (Sugam): Individuals, HUFs, and partnership firms (not LLPs) under presumptive taxation. Section 44AD: business turnover up to Rs 2 crore, declare at least 8% of turnover (6% for digital receipts). Section 44ADA: professionals with gross receipts up to Rs 75 lakh, declare at least 50%. Cannot be used if you have capital gains, are an NRI, or are a company director.
ITR-5: Partnership firms, LLPs, Association of Persons, Body of Individuals, and cooperative societies. Individual partners do not file ITR-5; the entity does.
ITR-6: All registered companies (private limited, public limited, Section 8, OPC). Mandatory e-filing.
ITR-7: Charitable trusts registered under Section 12A/12AB, political parties, and institutions exempt under Section 10(23C).
Quick Reference for AY 2026-27:
Salaried, no capital gains, no business: ITR-1 (if all eligibility conditions met)
Salaried + sold shares or property: ITR-2
Freelancer or consultant without capital gains: ITR-4 under Section 44ADA
Freelancer with capital gains: ITR-3
Small business under Section 44AD: ITR-4 (if no capital gains)
Small business with capital gains: ITR-3
LLP or partnership firm: ITR-5
Private limited company: ITR-6
For the full guide including AY 2026-27 schedule tips and Form 16/AIS reconciliation guidance: https://taxgarden.in/blog/types-of-itr-filing-india
Sources: Income Tax Act 1961, CBDT ITR notification AY 2026-27.