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Selecting the right ITR form is essential when filing income tax returns. Filing your return using the wrong form can lead to rejection by the Income Tax Department and even a delay in refunds. Among individual taxpayers, the most common confusion arises between ITR-1 (Sahaj) and ITR-2, both designed for taxpayers with specific income profiles.
Here’s a detailed guide to understand the key differences between these two forms –
What is Form ITR-1?
Form ITR-1, also referred to as ITR-1 (SAHAJ), is the most appropriate form for salaried individuals. This form should be selected by taxpayers with a total annual income of up to ₹50 lakh, owning one house property, agricultural income not exceeding ₹5,000, deriving income from other sources and long-term capital gains of up to ₹1.25 lakh under Section 112A.
Who is not eligible for Form ITR-1?
Individuals ineligible to file the ITR-1 form are —
What is ITR-2?
ITR-2 covers a wider range of income sources than ITR-1. Form ITR-2 is meant for individuals and Hindu Undivided Families (HUFs) with no business or professional income. Individuals and HUFs with a salaried income of more than ₹50 lakh, more than one house, all types of capital gains, foreign income, taxpayers owning unlisted shares, and agricultural income of more than ₹5,000 are eligible to file the ITR-2 form.
Who is not eligible for ITR-2?
Taxpayers ineligible for filing returns via ITR-2 are —Â
In conclusion, it is extremely important for every taxpayer to understand the eligibility criteria of every income tax return form before filing. In case of any doubts, a taxpayer must reach out to a professional or check the official guidelines on the Income Tax Department’s website.Â
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Readers are advised to consult a qualified tax professional for guidance specific to their financial situation and compliance requirements.
