Categories: Income tax Return

Guide for choosing the correct ITR form for AY 2026

Guide for choosing the correct ITR form for AY 2026

Guide for choosing the correct ITR form for AY 2026 (i.e., for income earned during FY 2024–25). Here’s a breakdown to help you or your clients file the correct Income Tax Return (ITR):

Which ITR Form is Right for You?

ITR 1 (Sahaj) : Eligible if:

    • Total income less than ₹50 lakh
    • Sources: Salary, Pension, One House Property, and Other Sources
    • LTCG under ₹1.25 lakh from listed stocks or equity mutual funds (Section 112A)

Note: Now permitted to include capital gains up to ₹1.25 lakh in ITR-1 (new rule)

ITR 2 : Income from:

    • Any source covered under ITR-1 but exceeding ₹50 lakh
    • LTCG above ₹1.25 lakh
    • Multiple house properties
    • Capital gains/losses from other assets
    • Foreign income or assets
    • Crypto income
    • Holding foreign directorships or shares
    • Carried forward losses

ITR 3 : Applicable when:

    • Income from business or profession
    • Partnership firm income
    • Includes all sources covered in ITR-2

ITR 4 (Sugam) : Presumptive income scheme

    • For individuals, HUFs, or firms (other than LLPs)
    • Income up to ₹50 lakh
    • From any source covered under ITR-1

Checklist of documents needed for tax filing for the FY 2024–25

Documents List for Income Tax Filing (FY 2024–25)

  • For Filing Income Tax Returns for the Financial Year 2024–25 with the due date being July 31, 2025. It also includes a helpful checklist of documents needed for tax filing.
  • Documents List for Tax Filing (FY 2024–25): Ensure all documents cover the full financial year: 1 April 2024 to 31 March 2025. Here’s a breakdown of the required documents:
    • Form 16 Part A & B (For salaried persons – issued by employer)
    • Stock Trading Information (Details of shares traded)
    • Bank Statements (Savings, Current, FD Passbook – covering 01.04.2024 to 31.03.2025)
    • Loan Statements (Home, Personal, Education Loans for the same period)
    • Property Transactions (Any property bought or sold)
    • Business Earnings (Applicable if you have income from business/profession)
    • Other Income (Rental income, bank interest, etc.)
    • Previous Year’s ITR (For reference and continuity)
    • Investment Proofs for Deductions (Section 80C – LIC, ELSS, PPF, tuition fees, etc.)
    • Other Deduction Proofs (Section 80D, 80G – Medical insurance, donations, etc.)

Key Changes for AY 2026 -More Disclosures in ITR :

  • Deductions & exemptions under 80C, HRA, home loans, donations, etc.
  • TDS on other incomes (dividends, interest) must be reconciled with Form 26AS and AIS.
  • Capital Gains after 23 July 2024 must be reported separately.

Simplified Rules:

  • HUFs are NOT eligible for ITR-1; must file using ITR-2, 3, or 4.
  • ITR-1 now allows LTCG up to ₹25 lakh from listed equity.
  • Schedule AL (Assets & Liabilities): Threshold raised to ₹1 crore.
  • Share buyback reporting:
    • Income now taxed as dividend under “Other Sources”
    • Buybacks post 1 Oct 2024: Capital gains can be adjusted.
Tags: correct ITR form
12 months ago
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