ITR-1 (Sahaj) is the Income Tax Return form for salaried individuals and pensioners with income up to ₹50 lakh, including income from salary, one house property, and other sources like interest. It cannot be used by individuals with business income or capital gains.

• Salaried or pensioned individuals

• Income up to ₹50 lakh

• Income sources include:

  • Salary or pension

  • Income from one house property

  • Income from other sources like interest, dividends, etc.

ITR-2 is an Income Tax Return form for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession but earn income from multiple sources such as salary, more than one house property, capital gains, and other sources. It is designed for taxpayers with complex income streams beyond the scope of ITR-1.

• Salary or pension

• More than one house property

• Capital gains (from sale of property, shares, etc.)

• Other sources like interest, dividends, etc.

ITR-3 is the Income Tax Return form for individuals and Hindu Undivided Families (HUFs) who have income from a business or profession, in addition to other sources like salary, capital gains, house property, and interest. It is designed for taxpayers with more complex income streams that cannot be reported in ITR-1 or ITR-2.

It is used by taxpayers who have:

• Income from business or profession (proprietorships, freelancers, professionals, etc.)

• Salary or pension

• Capital gains (from property, shares, etc.)

• Income from house property

• Other sources like interest or dividends

Key point: If you have business or professional income, ITR-3 is the appropriate form.