For income earned in FY 2025-26, ITR-1 may fit only if you are a qualifying resident individual with total income up to ₹50 lakh, permitted income sources and none of its exclusions. ITR-2 is generally the candidate for individuals or HUFs without taxable business or professional income who do not qualify for ITR-1—including people with income above ₹50 lakh, subject to the form’s detailed rules. If you have taxable business or professional income, look beyond both forms.
ITR-1 vs ITR-2 at a glance
The Income Tax Department’s AY 2026-27 guidance sets different eligibility boundaries for the two forms. Use this comparison to identify a likely fit, then verify your circumstances against the current form instructions.
| Eligibility question | ITR-1 (Sahaj) | ITR-2 |
|---|---|---|
| Who can file? | A qualifying resident individual who is not RNOR (resident but not ordinarily resident). | An individual, resident or non-resident, or a Hindu Undivided Family (HUF), if the business/profession condition is met. |
| Business or professional income | Not eligible if taxable income is chargeable under “Profits and Gains of Business or Profession.” | Also not eligible where taxable income is chargeable under “Profits and Gains of Business or Profession.” |
| Total-income limit | Up to ₹50 lakh, subject to the detailed eligibility rules. | The department’s eligibility FAQ says ITR-2 can be filed irrespective of total income, including above ₹50 lakh. |
| House property | Income from up to two house properties under AY 2026-27 guidance. | Can cover income from more than two house properties. |
| Capital gains | Limited: section 112A long-term capital gains up to ₹1.25 lakh under the listed conditions; other disqualifying capital-gains situations rule it out. | Includes capital gains, short-term or long-term, subject to the form instructions. |
| Other notable filters | Restrictions include certain foreign assets or income, director status, unlisted equity shares, specified losses, section 194N TDS and deferred ESOP tax. | Broader than ITR-1, but it is not the form for taxable business/profession income. |
These are the Income Tax Department’s AY 2026-27 eligibility distinctions, not a substitute for the full instructions. ITR-1 guidance and the ITR-2 FAQ should be checked for details.
How to choose your form
- Identify your taxpayer type and residence. ITR-1 is restricted to qualifying resident individuals who are not RNOR. ITR-2 is available to individuals, including non-residents, and HUFs, provided they have no taxable business/profession income.
- Check for taxable business or professional income. If you have income taxable under “Profits and Gains of Business or Profession,” neither ITR-1 nor ITR-2 is the fit. Investigate the rules for ITR-3 or, if you independently meet its conditions, ITR-4. Verify those rules separately.
- Test ITR-1’s income ceiling and permitted sources. For AY 2026-27, the general ceiling is total income of ₹50 lakh. Permitted categories include salary or pension, income from up to two house properties, specified other sources, agricultural income up to ₹5,000, and section 112A long-term capital gains up to ₹1.25 lakh, subject to the detailed conditions.
- Review every ITR-1 exclusion. A salary income source does not override an exclusion. If any disqualifying circumstance applies, do not select ITR-1 just because most of your income comes from employment.
- Consider ITR-2 if you have no business/profession income. It is the likely option when you are outside ITR-1’s narrower eligibility—for example, because of capital gains, more than two house properties, non-resident status or total income above ₹50 lakh.
- Confirm the assessment year and current instructions. The department provides AY-specific filing utilities and materials. Select AY 2026-27 and check the form guidance before submitting.
When ITR-1 is not available
The ITR-1 eligibility guidance lists exclusions beyond the income ceiling and allowed income categories. Check the full AY 2026-27 instructions, especially if any of these apply:
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- You have short-term capital gains, or section 112A long-term capital gains exceeding ₹1.25 lakh.
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If you have capital gains
Do not assume that any capital gain rules out ITR-1, or that every gain is permitted. Under AY 2026-27 guidance, ITR-1 allows section 112A long-term capital gains up to ₹1.25 lakh if the other conditions are met. Short-term capital gains and section 112A long-term gains above that limit are among the exclusions. ITR-2 covers capital gains, including short-term and long-term gains, where there is no taxable business/profession income and the other conditions fit.
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The ₹50 lakh ceiling applies to ITR-1. The Income Tax Department’s ITR-2 FAQ says: “ITR 2 Form can be filed irrespective of the quantum of total income, including cases where total income exceeds ₹50 lakhs.” That makes ITR-2 a possible form for an otherwise eligible individual or HUF without taxable business/profession income; it does not remove the need to meet ITR-2’s other conditions.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Check the current AY 2026-27 utility
The Income Tax Department lists AY 2026-27 online and offline filing options. Its downloads page identifies a common offline utility for ITR-1 through ITR-4 and ITR-specific materials. The page lists common offline utility version 1.2.4, with a latest release date of 2 September 2026; check the page for any newer release before downloading.
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Start from the department’s downloads page, select the correct assessment year, and consult the applicable form instructions. For an unusual combination of income, residence, assets or losses, use the full form, rules and notifications rather than relying on an overview page; the department notes that its overview guidance is not exhaustive.
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