Which ITR Form to File for Salaried Person: Still Confused? Find Your Answer Here
Filing your Income Tax Return (ITR) accurately is crucial for compliance with Indian tax regulations. Salaried individuals often ask about the appropriate ITR form during tax season.
This confusion often arises between ITR-1, ITR-2, and occasionally, ITR-4. Selecting the appropriate ITR form facilitates a seamless filing process. It also safeguards against notices from the Income Tax Department.
In this post, I will break down the eligibility, differences, and use cases for ITR-1, ITR-2, and ITR-4, helping you answer questions like:
How do I know if I have ITR1 or ITR2?
Which ITR form should be filed?
Should we file ITR 1 or ITR 2?
Should I file ITR 1 or 4?
What Is an ITR Form?
ITR is an Income Tax Return (ITR) form that is a prescribed format for taxpayers. They use it to declare their income, deductions, exemptions, and tax payable to the government. The Income Tax Department notifies different forms for different classes of taxpayers.
If you submit your income tax return without using the applicable ITR for you, it will be a defective return. In such a case, you would get an income tax notice very soon.
Which ITR Form to File for Salaried Person?
If you’re a salaried individual, the two most relevant ITR forms are ITR-1 (Sahaj) and ITR-2. In some cases, ITR-4 may be relevant if you have additional income from presumptive business under section 44ADA/44AD.
To determine which ITR form to file, consider your sources of income, residential status, and income level.
Let’s break it down.
Which ITR Form to File for Salaried Person: ITR-1 Form (Sahaj): For Simpler Tax Profiles
The ITR-1 form is designed for resident individuals with simple income structures, primarily from:
- Salary or pension
- One house property
- Other sources (like interest income)
- Agricultural income up to ₹5,000
ITR-1 Applicability Criteria
| Criteria | Applicable? |
|---|---|
| Salary or Pension | ✅ |
| One House Property | ✅ |
| Other Sources (e.g., Interest Income) | ✅ |
| Agricultural Income up to ₹5,000 | ✅ |
✅ Eligibility Criteria for ITR-1
You can file ITR-1 if:
- You are a resident individual (not HUF or company)
- Your total income is up to ₹50 lakh
- Your income sources are:
- Salary or pension
- One house property
- Interest income
- Family pension
- You don’t have:
- Capital gains
- Business or professional income
- Foreign assets or income
- Agricultural income > ₹5,000
✅ Eligibility Criteria for ITR-1
| You can file ITR-1 if: | |
|---|---|
| ✅ | You are a resident individual (not HUF or company) |
| ✅ | Your total income is up to ₹50 lakh |
| ✅ | Your income sources include: |
| — Salary or pension | |
| — One house property | |
| — Interest income | |
| — Family pension | |
| You cannot file ITR-1 if you have: | |
| ❌ | Capital gains income |
| ❌ | Business or professional income |
| ❌ | Foreign assets or foreign income |
| ❌ | Agricultural income over ₹5,000 |
❌ Not Eligible for ITR-1 If:
- You are a Non-Resident (NRI) or Resident but Not Ordinarily Resident (RNOR)
- Your total income exceeds ₹50 lakh
- You have capital gains (short-term or long-term)
- You own more than one house property
- You have foreign income or assets
- You have income from freelancing, business, or profession
❌ Not Eligible for ITR-1 If:
| Reason for Ineligibility | |
|---|---|
| ❌ | You are a Non-Resident (NRI) or Resident but Not Ordinarily Resident (RNOR) |
| ❌ | Your total income exceeds ₹50 lakh |
| ❌ | You have capital gains (short-term or long-term) |
| ❌ | You own more than one house property |
| ❌ | You have foreign income or foreign assets |
| ❌ | You have income from freelancing, business, or profession |
Which ITR Form to File: ITR-2 Form: For Complex Income Situations
The ITR-2 form is for individuals and HUFs not having income from business or profession.
✅ Eligible to File ITR-2 If:
- You are an individual or HUF
- Your total income exceeds ₹50 lakh
- You earn income from:
- Salary or pension
- More than one house property
- Capital gains (sale of shares, mutual funds, property, etc.)
- Foreign income or foreign assets
- Dividend income exceeding ₹10 lakh
- You are a director in a company or invested in unlisted shares
❌ ITR-2 Not For:
- Individuals with business or professional income under regular or presumptive taxation (they need to file ITR-3 or ITR-4)
ITR-2 Filing Eligibility
| ✅ Eligible to File ITR-2 If | ❌ Not Eligible to File ITR-2 If |
|---|---|
|
|
Which ITR Form to File: ITR-4 Form (Sugam): For Presumptive Income
While ITR-4 is generally not applicable for salaried individuals, it becomes relevant if you have additional presumptive income under:
- Section 44AD – Small business
- Section 44ADA – Freelancers/professionals (lawyers, consultants, designers)
- Section 44AE – Transporters
| Section | Who It Applies To | Type of Income | ITR-4 Applicable? |
|---|---|---|---|
| Section 44AD | Small Business Owners | Presumptive Business Income | ✅ Yes |
| Section 44ADA | Freelancers / Professionals (Lawyers, Consultants, Designers) |
Presumptive Professional Income | ✅ Yes |
| Section 44AE | Transporters (Owning ≤ 10 goods vehicles) |
Presumptive Transport Income | ✅ Yes |
🔸 Note: ITR-4 is not applicable for salaried individuals unless they also earn income under the presumptive taxation schemes listed above.
Which ITR Form to File for Salaried Person: Should I File ITR 1 or 4?
If you are only a salaried employee, ITR-4 is not for you. However, if you have both salary income and income from freelancing (under presumptive taxation like 44ADA), ITR-4 may be applicable.
Which ITR Form to File: Should We File ITR 1 or ITR 2?
This is one of the most common dilemmas. Let’s clarify with a table:
📊 ITR-1 vs ITR-2: Feature Comparison
| Criteria | ITR-1 | ITR-2 |
|---|---|---|
| Income up to ₹50 lakh | ✅ Yes | ✅ Yes |
| Only salary/pension income | ✅ Yes | ✅ Yes |
| Income from one house property | ✅ Yes | ✅ Yes |
| Income from multiple house properties | ❌ No | ✅ Yes |
| Capital gains income | ❌ No | ✅ Yes |
| Foreign assets/income | ❌ No | ✅ Yes |
| Dividend > ₹10 lakh | ❌ No | ✅ Yes |
| Agricultural income > ₹5,000 | ❌ No | ✅ Yes |
So, if you have capital gains (say from selling mutual funds or shares), then ITR-2 is mandatory. Otherwise, ITR-1 may be sufficient.
Which ITR Form to File for Salaried Person: How Do I Know if I Have ITR1 or ITR2?
To determine which ITR form you should use:
- Check your Form 16 – This shows your salary and TDS details.
- Add other incomes – Interest on FD, rental income, etc.
- Check for capital gains – Sale of stocks, mutual funds, or property?
- Review income from house property – Do you have one or more?
- Look for foreign income or assets – NRO/NRE account, foreign shares?
- Check if you’re an NRI – Only ITR-2 (not ITR-1) is allowed.
Which ITR Form to File for Salaried Person: ITR-1 or ITR-2?
| Check This | Details | File ITR-1? | File ITR-2? |
|---|---|---|---|
| 💼 Salary Income | Salary and TDS info from Form 16 | ✅ Yes | ✅ Yes |
| 🏦 Other Income | Interest on FD, savings, etc. | ✅ Yes | ✅ Yes |
| 📈 Capital Gains | Sale of shares, mutual funds, or property | ❌ No | ✅ Yes |
| 🏠 House Property | More than one house or property-related losses | ❌ No | ✅ Yes |
| 🌐 Foreign Income/Assets | NRO/NRE accounts, foreign shares or assets | ❌ No | ✅ Yes |
| 🌍 NRI Status | You’re a Non-Resident Indian (NRI) | ❌ No | ✅ Yes |
🔸 Note: ITR-1 is suitable only for residents with simple income sources. If you have capital gains, multiple house properties, or foreign income/assets, you must file ITR-2.
Which ITR Form I Need to File: Still Confused?
If your only income is from salary, interest, and one house property, and it’s under ₹50 lakh → ITR-1
If you have capital gains, foreign income, or more than one house property → ITR-2
If you have income from business or profession (like freelancing) under presumptive scheme → ITR-4
Comparison: ITR-1 vs ITR-2 vs ITR-4
| Feature | ITR-1 | ITR-2 | ITR-4 |
|---|---|---|---|
| Type of taxpayer | Individual | Individual / HUF | Individual / HUF / Firm (other than LLP) |
| Salary income | ✅ | ✅ | ✅ |
| One house property | ✅ | ✅ | ✅ |
| More than one house property | ❌ | ✅ | ✅ |
| Capital gains | ❌ | ✅ | ❌ |
| Foreign income/assets | ❌ | ✅ | ❌ |
| Presumptive business income | ❌ | ❌ | ✅ |
| Freelancing under 44ADA | ❌ | ❌ | ✅ |
| Total income limit | ₹50 lakh | No limit | ₹50 lakh |
| NRI applicability | ❌ | ✅ | ✅ |
Which ITR Form to File for Salaried Person: Common Mistakes While Choosing ITR Form
- Filing ITR-1 despite having capital gains – This is a major error.
- Using ITR-1 while having more than one house property – ITR-2 is needed.
- Filing ITR-1 while being an NRI – Not allowed. Use ITR-2.
- Incorrectly using ITR-4 for salaried income – Not suitable unless you have presumptive business/profession income.
Common Mistakes While Choosing ITR Form (Salaried Person)
| 🚫 Mistake | ⚠️ Why It’s Wrong | ✅ Correct ITR Form |
|---|---|---|
| 📉Filing ITR-1 despite having capital gains | ITR-1 does not support reporting capital gains. | Use ITR-2 |
| 🏠Using ITR-1 with more than one house property | ITR-1 is only for one house property. | Use ITR-2 |
| 🌍Filing ITR-1 while being an NRI | ITR-1 is not allowed for NRIs. | Use ITR-2 |
| 💼Using ITR-4 for salaried income | ITR-4 is meant for presumptive business/professional income. | Use ITR-1 or ITR-2 (based on income type) |
Which ITR Form to File for Salaried Person: Sample Scenarios
Scenario 1:
A salaried employee with ₹15 lakh salary and ₹1.5 lakh interest from FD. One house in own name.
→ File ITR-1 without fail
Scenario 2:
Salaried employee with ₹18 lakh income, owns two flats – one self-occupied and one rented.
→ File ITR-2(Once you have more than one house property, ITR 2 is for you)
Scenario 3:
IT consultant with ₹10 lakh salary + ₹6 lakh freelancing income (under 44ADA).
→ File ITR-4
Scenario 4:
NRI with ₹12 lakh salary income earned in India and FD interest from NRO account.
→ File ITR-2
Which ITR Form to File for Salaried Person: How to File ITR-1 or ITR-2 Online?
You can file your ITR through:
- Income Tax Portal: https://incometax.gov.in
- Offline utility: Download Excel/Java utility
- Private tax filing platforms like ClearTax, TaxBuddy, etc.
For salaried individuals with Form 16, the Income Tax Portal offers a pre-filled ITR option.
Which ITR Form to File for Salaried Person: Penalty for Filing Wrong ITR Form
Filing the wrong ITR form may result in:
- Your return is being treated as defective under section 139(9)
- Notice from Income Tax Department
- Delay in refund
- Penalty or even scrutiny
- Unprecedented headache
✅ Conclusion: Which ITR Form to File?/ Which ITR Form I need to file?
It is very easy to find out which ITR Form I need to file. Please go through the below one-liners for memorising:
- Simple salaried individual → ITR-1
- Salaried + Capital Gains / Multiple House Properties / Foreign Assets / NRI → ITR-2
- Salaried + Freelancing (presumptive) → ITR-4
Finally, I would suggest consulting a tax expert when you are still in doubt. You can also use the guided options on the Income Tax Portal to help you choose.
