Earn less than ₹50 lakh a year? Check which ITR form to file

If you’re a salaried individual earning less than Rs 50 lakh a year, you probably only need to choose between two forms: ITR-1 or ITR-2. Here's how to know which one fits your situation best.

1. ITR-1 (Sahaj)

This is the most commonly used form for salaried individuals.

You can file ITR-1 if you:

• Are a resident individual
• Earn up to Rs 50 lakh annually
• Have income from:
  - Salary or pension

- One house property (not let out or loss-making)

- Other sources like bank interest

- Agricultural income up to Rs 5,000

You cannot use ITR-1 if:

• You are a Director in a company
• You own unlisted shares
• You have capital gains (from stocks, mutual funds, among others)
• You have foreign income or foreign assets
• You are claiming relief under Section 90 or 91 (for foreign taxes paid)

In short, if your income is straightforward (salary, savings interest and a self-occupied house), you’re good to go with ITR-1.

2. ITR-2

You’ll need ITR-2 if:

• You have capital gains (e.g., from selling shares, mutual funds or property)
• You own more than one house property
• You have foreign income or hold foreign assets
• You earn more than Rs 5,000 in agricultural income
• You are a Director in a company or hold unlisted equity shares
• You are a non-resident Indians

ITR-2 is for those who still earn under Rs 50 lakh but have broader or more diversified income sources than just salary, including ESOPs.

3. What about ITR-3?

That’s for business owners and freelancers. If you’re in full-time employment and don’t run a business or do freelance work, you can safely ignore it.

Quick recap

• ITR-1 = Salary + one house + bank interest
• ITR-2 = Salary + capital gains/multiple houses/foreign income
• ITR-3 = For business or professional income (not covered here)

Bottom line

If you're earning under Rs 50 lakh a year, the right ITR form mostly depends on how you earn, not just how much. Choosing the correct form ensures your return gets processed smoothly and on time.

Filing taxes doesn’t need to be stressful. Just make sure you’re using the right form and submit it by September 15, 2025.

Also read: How to disclose income from US stocks in ITR

This article was originally published on July 24, 2025.