ITR-1, ITR-2, ITR-3 and ITR-4 compared
When can I not use ITR-1?
Even with income under ₹50 lakh, ITR-1 is not available if any of these apply to you:
- You are a director in a company
- You have short-term capital gains of any amount
- Your long-term gains under section 112A are above ₹1.25 lakh
- You held unlisted equity shares during the year
- You have assets or income outside India, or signing authority in an account outside India
- Tax was deducted under section 194N (cash withdrawals)
- You have tax deferred on ESOPs
- You have losses brought forward from an earlier year
Most of these move you to ITR-2. If you also have business or professional income, it is ITR-3 or ITR-4.
Which ITR form if I trade shares or F&O?
Selling shares or mutual funds creates capital gains. Short-term gains of any amount, or section 112A gains above ₹1.25 lakh, take you off ITR-1, usually to ITR-2.
Intraday trading and futures and options (F&O) are treated as business income, not capital gains, so they need ITR-3.
Do I have to pick the form myself?
Not when a CA files for you. You describe your income in the chat and send the documents; your CA picks the form from those.
Section numbers on this page are from the Income-tax Act, 1961, which governs AY 2026-27. From AY 2027-28 (income earned from 1 April 2026) the Income-tax Act, 2025 applies, and section numbers change.
Common questions
Can I file ITR-1 if my income is above ₹50 lakh?
No. For AY 2026-27, ITR-1 is for total income up to ₹50 lakh. Above that, a salaried person usually files ITR-2.
I sold some mutual funds at a profit. Can I still use ITR-1?
Only if the gain is long-term under section 112A and no more than ₹1.25 lakh, and you have no short-term gains. Otherwise you need ITR-2.
I am a freelancer. Is it ITR-3 or ITR-4?
ITR-4 if you declare income under the presumptive scheme for professionals (section 44ADA) and meet its limits. Otherwise ITR-3.
SOURCES