✅ Which ITR Form Should You File? Simple Explanation for Salaried, Freelancers & Business Owners (2025 Guide)
Easy Guide by CA Shiwali & Co., Chartered Accountants in Delhi
Choosing the correct ITR (Income Tax Return) form is one of the biggest confusions taxpayers face every year. Filing the wrong ITR may lead to notices, processing delays, and rejection of the return.
So, here is a very simple, beginner-friendly guide to help you understand exactly which ITR form you should file in 2025 — whether you are a salaried employee, freelancer, small business owner, landlord, trader, or senior citizen.
⭐ What Are the Different ITR Forms?
The Income Tax Department has multiple forms because different types of taxpayers have different types of income.
The most commonly used forms are:
ITR-1
ITR-2
ITR-3
ITR-4
We will explain each in a clear and simple way.
🧾 1️⃣ ITR-1 (Sahaj) – For Salaried Individuals Only
Who should file this?
✔ Salaried employees
✔ Pensioners
✔ Income from one house property
✔ Income from interest (FD, savings account)
✔ Total income up to ₹50 lakh
Who cannot file ITR-1?
❌ If you have capital gains
❌ If you have business income
❌ If income is above ₹50 lakh
❌ If you have more than one house property
❌ If you are a director in a company
Example:
A salaried person working in Delhi earning ₹12 lakh salary + some FD interest.
👉 Should file ITR-1
🧾 2️⃣ ITR-2 – For Salaried Individuals With Extra Income
Who should file this?
✔ Salary + Capital Gains (mutual funds, shares, property sale)
✔ Salary + More than one house property
✔ NRI or Resident but Not Ordinarily Resident (RNOR)
✔ Salary + foreign income
✔ No business income
Who cannot file ITR-2?
❌ Anyone having business income
❌ Freelancers running a profession
Example:
A salaried employee in South Delhi who sold shares or property during the year.
👉 Should file ITR-2
🧾 3️⃣ ITR-3 – For Business Owners & Professionals
Who should file this?
✔ Business income
✔ Freelancers (Influencers, consultants, graphic designers, developers, lawyers, doctors, architects, etc.)
✔ Commission/ brokerage income
✔ Partners in firms (without salary/interest—conditions apply)
✔ Rental, capital gains, interest, dividend — all allowed
Who cannot file ITR-3?
❌ If opting for presumptive taxation (44AD/44ADA) → use ITR-4 instead
Example:
A freelancer earning through UPI, Paytm, Razorpay, foreign clients, or a small shop owner in Delhi.
👉 Should file ITR-3
🧾 4️⃣ ITR-4 (Sugam) – For Presumptive Income Tax
Suitable for small businesses and professionals who want simple filing.
Who should file this?
✔ Business income under 44AD
✔ Professional income under 44ADA (CA, doctor, lawyer, architect, freelancer)
✔ Income up to ₹50 lakh
✔ Income declared on a presumptive basis (fixed % profit)
Who cannot file ITR-4?
❌ Total income above ₹50 lakh
❌ More than one house property
❌ Foreign income
❌ Capital gains
❌ Directors in companies
Example:
A CA, lawyer, or designer earning ₹18 lakh who wants easy filing without maintaining books.
👉 Should file ITR-4
🗂️ Quick Summary: Which ITR Form Is Right for You?
| Type of Taxpayer | Correct ITR Form |
|---|---|
| Salaried, income ≤ ₹50 lakh | ITR-1 |
| Salaried + Capital gains | ITR-2 |
| Salaried + More than 1 house property | ITR-2 |
| Freelancer (normal taxation) | ITR-3 |
| Freelancer (44ADA presumptive) | ITR-4 |
| Small business owner (44AD) | ITR-4 |
| Business income (regular books) | ITR-3 |
| Investor/trader in stocks | ITR-2 or ITR-3 |
| NRI | ITR-2 or ITR-3 |
⚠️ What Happens If You File the Wrong ITR Form?
Many people make this mistake and later receive a notice.
Filing the wrong ITR can lead to:
❌ Return being rejected
❌ Refund delay
❌ Penalties
❌ Scrutiny notice
❌ Need to re-file the entire return
Better to avoid the risk — get expert help.
⭐ Still Confused About Which ITR You Should File?
This is normal. Even educated taxpayers get confused because rules change every year.
That’s why thousands of people prefer a professional CA to handle their tax filing.
📞 Need Help Choosing the Right ITR & Filing Your Return?
At CA Shiwali & Co., we help:
✔ Salaried individuals
✔ Freelancers & professionals
✔ Business owners
✔ NRIs
✔ Investors
✔ Senior citizens
We ensure:
✔ Correct ITR selection
✔ Maximum tax savings
✔ Accurate AIS/26AS matching
✔ Quick refund
✔ Zero errors or notices
📍 Chartered Accountants in New Delhi, South Delhi
🌐 Website: www.cashiwali.com
📞 Call/WhatsApp: 9266032777
Let experts handle your Income Tax Return filing for 2025.
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