The Income Tax Department has seven ITR forms, but most individuals only ever need one of four. Here is who files what, minus the jargon.
ITR-1 (Sahaj): the simple one
For resident individuals with income up to Rs 50 lakh from salary or pension, one house property, and other sources like bank interest. If you are a typical salaried person, this is you. 'Sahaj' literally means easy, and it is.
ITR-2: for investors and property owners
You need ITR-2 the moment you have capital gains (sold shares, mutual funds, property or crypto), more than one house property, foreign income or assets, or income above Rs 50 lakh. Salaried people with stock market gains are the most common ITR-2 filers.
ITR-3: for business and profession with books
If you run a business or practice a profession and maintain proper books of accounts, or you trade in futures and options (F&O counts as business income), ITR-3 is your form. It is the most detailed of the lot, and this is where a good platform or a CA earns their fee.
ITR-4 (Sugam): for presumptive taxation
Freelancers, consultants, doctors, small shop owners: if you use the presumptive scheme under Section 44ADA (50% of receipts deemed as profit) or 44AD (6 to 8% of turnover), ITR-4 keeps things beautifully simple. No books, no audit, just your gross receipts.
What if you pick the wrong form?
Your return can be marked defective, and you will get a notice asking you to refile. It is fixable but stressful. This is exactly why Saathi.Tax asks you seven simple questions about your year and selects the form automatically. You never have to think about form numbers again.
