Which ITR Form Should You File for AY 2025–26 (FY 2024–25)? | Complete Income-Wise Guide
Priya Kumari • June 21st, 2025 • 4 min read • 👁️ 392 views • 💬 0 comments
The hardest thing in the world to understand is income tax. — Albert Einstein
Updated for Assessment Year 2025–26 | Based on FY 2024–25 Income Rules
Avoid Mistakes: Wrong ITR Form Can Cost You! Select Correct Form Based on Income – AY 2025–26
Introduction:
Confused about which ITR form to file for AY 2025–26? You're not alone! With multiple income types like salary, business, crypto, F&O trading, rent, capital gains, or even foreign income, selecting the correct ITR form is crucial to avoid notices, rejections, and penalties from the Income Tax Department.
In this blog, we break down exactly which ITR form (ITR-1, 2, 3, or 4) is applicable to you based on your specific income situation.
| S.No | Income / Situation | ITR Form to Use | Reason |
|---|---|---|---|
| 1 | Short Term Capital Gain (STCG) from sale of equity and mutual fund – Even ₹1 Profit | ITR 2 / ITR 3 | ITR 2: For investments like mutual funds or shares ITR 3: For share trading (business income) |
| 2 | Long Term Capital Gains (LTCG) > ₹1.25 lakh from equity/mutual fund | ITR 2 / ITR 3 | ITR 2: Allowed up to ₹1.25L under Sec 112A ITR 3: If part of business income |
| 3 | Capital gains from unlisted shares, land, or property | ITR 2 | Treated as regular capital gains |
| 4 | Capital gains from sale of property (land/building) | ITR 2 | Real estate sale = capital gain |
| 5 | More than one house property | ITR 2 | ITR-1 allows only 1 house property |
| 6 | Business or Professional Income (doctor, shopkeeper, etc.) | ITR 3 or ITR 4 | ITR 4: If using presumptive under 44AD/ADA/AE |
| 7 | Speculative Income (intraday, F&O) | ITR 3 | Speculative income = business income |
| 8 | Crypto / NFT (VDA) Income | ITR 2 / ITR 3 | ITR 2: If capital gains ITR 3: If regular business |
| 9 | Carry-forward of losses (house/capital gains) | ITR 2 / ITR 3 | Depends on whether you have business income |
| 10 | Foreign Assets / Income (e.g., US Stocks) | ITR 2 / ITR 3 | ITR 2: For salary/capital gain ITR 3: With business income |
| 11 | Director in a company | ITR 2 / ITR 3 | Based on type of income (salary or business) |
| 12 | Employee of foreign company with ESOPs | ITR 2 | ESOPs = foreign assets |
| 13 | Interest from Foreign Bank | ITR 2 | Report as foreign income |
| 14 | Dividend from Foreign Companies | ITR 2 | Foreign income |
| 15 | Lottery / Horse Race Winnings | ITR 2 | Taxed at special rate; ITR-1 not allowed |
| 16 | Freelance services (writer, consultant, etc.) | ITR 3 | Professional income |
| 17 | Consultant using presumptive taxation (44ADA) | ITR 4 | Only if eligible |
| 18 | Pension + 2 houses + capital gains | ITR 2 | Multiple properties + gains = ITR-2 |
| 19 | Salary + Lottery winnings | ITR 2 | Special rate income = ITR-2 |
| 20 | Pension Income only | ITR 1 | If total income ≤ ₹50 lakh and eligible |
Common Mistakes to Avoid:
- Filing ITR-1 despite having capital gains or foreign assets
- Ignoring crypto/VDA schedule in ITR-2/3
- Not disclosing intraday/F&O trades as business income
- Selecting ITR-4 without qualifying for presumptive taxation
Expert Tip:
Always match your AIS, Form 26AS, and broker statements before selecting your ITR form. A mismatch or wrong form can lead to scrutiny notices.
Still Confused?
Contact us with your income details for free ITR form advisory from Multigyan’s finance team!
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