Which ITR Form to File

ITR-1 is the salary form: resident individuals, income up to Rs 50,00,000, no capital gains. Anything outside that fence moves the return to ITR-2.

ITR-1 covers a resident individual whose income is salary plus income from other sources, such as interest, with total income up to Rs 5,000,000 — Rs 50,00,000 — in the financial year. For a straightforward salaried year, this is the whole decision.

The exclusion that matters most is capital gains. ITR-1 does not accept them at all, so even a single small profit from selling shares or a mutual-fund unit moves the return to ITR-2. The amount of the gain is irrelevant; its presence is the trigger.

Crossing Rs 50,00,000 of total income has the same effect: the return can no longer be filed on ITR-1 and moves to ITR-2 regardless of how simple the income is.

Choosing the wrong form is not a cosmetic error. The return can be served a defective-return notice under section 139(9), after which it must be corrected and refiled — while the 31 July clock, the section 234F fee and the 1% monthly interest keep running against any unpaid tax.

A quick decision routine: confirm resident-individual status, total the year's income and check it against Rs 50,00,000, then check whether any capital gain exists. If both checks pass, file ITR-1; otherwise file ITR-2. The regime choice is a separate question, covered in New vs Old Tax Regime, and the same deadline applies to both forms — see ITR Deadline and Late Fees.

• Resident individual with salary and interest income only: ITR-1.
• Total income above Rs 50,00,000: ITR-2.
• Any capital gain, however small: ITR-2.
• Wrong form filed: expect a defective-return notice under section 139(9) and refile correctly.

Further reading

• ITR Deadline and Late Fees
• New vs Old Tax Regime