Introduction: Choosing the Right ITR Form is Crucial

Confused about which ITR form to file for FY 2024-25? You’re not alone.
With multiple Income Tax Return (ITR) forms available—each tailored to specific income types and taxpayer categories—it’s easy to get overwhelmed. But choosing the correct ITR form is not just a technical detail; it’s the foundation of a smooth, penalty-free filing experience.

The ITR filing deadline for FY 2024-25 (AY 2025-26) is July 31, 2025, for most individual taxpayers. That means it’s time to get your documents ready and select the right ITR form before rushing into filing. A mismatch between your income sources and ITR form can lead to rejection of your return, delayed refunds, or even tax notices.

Whether you're a salaried employee, freelancer, small business owner, or a consultant, the ITR form you choose must align with your sources of income, turnover, and claim preferences. And this starts with using documents like:

• Form 16 – for salaried individuals

• Form 26AS – for tracking taxes deducted by others

• AIS (Annual Information Statement) – for complete financial overview

By cross-verifying your income from these sources, you can confidently pick the correct ITR form, file accurately, and avoid unnecessary hassle later.

Let’s decode all 7 ITR forms applicable for AY 2025–26, who they apply to, and help you decide which one is meant for YOU.

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Overview of All ITR Forms (AY 2025–26)

To file your income tax return online in 2025, you’ll need to choose from ITR-1 to ITR-7, depending on your income profile, taxpayer category, and financial activities. Here’s a detailed comparison to help you navigate the options:

Let’s break down when to use each form, with real examples:

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🔹 ITR-1 (Sahaj) – Most Common for Salaried

Use this if you are:

• A resident individual

• Have income below ₹50 lakh

• Earnings only from salary, pension, interest income, and one house property

Not for:

• Freelancers or business owners

• Those with capital gains, crypto, or foreign income

Example: A school teacher with ₹9.5L salary and ₹25K bank interest uses ITR-1.

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🔹 ITR-2 – For Those with Capital Gains or More Than One Property

Use this if:

• You have capital gains from shares, mutual funds, property sale, etc.

• Own more than one property

• Have foreign assets/income

• Income still not from business or freelancing

Example: A salaried person who sold mutual funds in FY 2024-25 must use ITR-2.

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🔹 ITR-3 – For Business, Freelancers & Professionals

Use this if you:

• Are a freelancer, consultant, trader, or have proprietorship business

• Have business or professional income (regular or contract basis)

• Income includes capital gains, house rent, etc.

Example: A digital marketer earning ₹15L as a freelancer files ITR-3.

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🔹 ITR-4 (Sugam) – For Presumptive Income Filers

Use this if:

• You have presumptive income under Sections 44AD, 44ADA, 44AE

• Your turnover is less than ₹2 Cr (business) or ₹50L (profession)

Fast, simple, no books required.

Example: A small shop owner with ₹45L turnover who opts for 8% presumed profit → ITR-4.

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🔹 ITR-5, ITR-6, ITR-7 – For Firms, Companies & Trusts

• ITR-5: LLPs, partnerships, societies (Not for individuals)

• ITR-6: Companies (excluding section 11)

• ITR-7: Trusts, charitable institutions (under 139(4A)-(4F))

Unless you are running a legal entity, you won’t need these.

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🧠 Pro Tip:

Before selecting your ITR form:

• Download Form 26AS from the income tax portal

• Check your AIS (Annual Information Statement) for total income visibility

• Match with your Form 16 if salaried

This will help you choose your ITR form with full confidence and transparency.

ITR Form for Freelancers, Consultants & Gig Workers

With the booming digital economy, more Indians are working independently — from freelance developers and content creators to consultants, YouTubers, influencers, and gig workers. But unlike salaried employees, your ITR form will vary based on how you handle your income.

The most common forms for freelancers are ITR-3 and ITR-4.

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👉 Use ITR-3 if:

• You are not opting for the presumptive taxation scheme

• You earn from:

  • Freelancing (writing, design, digital marketing, coding, etc.)

  • Consultancy (legal, CA, doctors, architects, coaches)

  • Business income

• You want to claim actual expenses (laptop, internet, office rent, electricity, etc.)

• Your income exceeds ₹50 lakh or you have capital gains

ITR-3 requires you to maintain books of accounts and prepare a profit and loss statement along with a balance sheet. It offers maximum flexibility and is ideal for professionals who want to claim deductions for business expenses.

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👉 Use ITR-4 (Sugam) if:

• You are eligible for the presumptive taxation scheme under Section 44ADA (for professionals)

• Your gross receipts are less than ₹50 lakh

• You don’t want to maintain books of accounts

Under Section 44ADA, you can declare 50% of your gross receipts as income and pay tax accordingly. It’s simple, fast, and fully legal.

Example:
A freelance content writer earning ₹15 lakh annually from multiple clients can simply file ITR-4 by declaring ₹7.5 lakh as taxable income (50% of ₹15 lakh) under presumptive taxation.

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📄 Documents Needed for Freelancers:

• Client invoices and payment receipts

• Bank statements

• GPay/UPI/PayPal transaction records

• TDS certificates (Form 16A)

• Expense bills (if filing ITR-3)

• AIS & Form 26AS for consolidated tax view

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⚖️ ITR-3 vs. ITR-4: Which One Should You Choose?

📌 Note: You can’t claim actual expenses under ITR-4. If your expense ratio is high, ITR-3 is better.

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✅ How SSCOIndia Helps Freelancers:

Filing as a freelancer can get tricky, especially when dealing with:

• Multiple clients

• GST and TDS deductions

• Foreign payments

• Confusion around ITR-3 vs. ITR-4

At SSCOIndia.com, we:

• Review your earnings and expenses

• Suggest the best ITR form (with minimum tax)

• Prepare books of accounts if needed

• Ensure legal compliance and maximize savings

📢 Freelancing doesn’t have to mean tax headaches — let SSCOIndia handle your ITR while you focus on your work!

ITR Form for Business Owners & Traders [FY 2024–25]

If you run a business, own a shop, trade stocks, or operate as a sole proprietor, choosing the correct ITR form is crucial to stay compliant and avoid scrutiny. Business income comes under a completely different tax treatment compared to salary or freelancing income.

Let’s simplify which ITR form applies to business owners and traders in FY 2024–25 (AY 2025–26):

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👉 Sole Proprietors – Use ITR-3

If you operate as a sole proprietorship and maintain books of accounts (profit & loss, balance sheet), you must file your taxes using ITR-3. This form allows:

• Claiming actual business expenses (like office rent, travel, salaries)

• Adjusting losses

• Reporting depreciation, inventory, and loans

✅ Ideal for shopkeepers, online sellers, distributors, digital product sellers, traders, etc.

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👉 Presumptive Taxpayers (Section 44AD) – Use ITR-4 (Sugam)

If your business turnover is under ₹2 crore and you don’t want to maintain books of accounts, you can opt for the presumptive taxation scheme under Section 44AD.

In that case, file your return using ITR-4, where you declare:

• 8% of your turnover as income (or 6% for digital receipts)

• No need to maintain detailed records

📌 Example: A small general store earning ₹40 lakh revenue can file ITR-4 by declaring ₹3.2 lakh as income (8%).

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👉 Partnership Firms & LLPs – Use ITR-5

Partnerships and LLPs must file their income tax return using ITR-5, regardless of whether they opt for presumptive taxation or normal accounting.

It includes details like:

• Partner share

• Firm's income & tax liability

• Balance sheet and P&L

🔍 Note: Partners themselves must file ITR-3 for their individual share.

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👉 Private Limited Companies, OPCs, Startups – Use ITR-6

If you own a registered company (excluding those claiming exemption under Section 11), your ITR form is ITR-6.

It includes:

• Gross turnover

• Tax computation (including MAT if applicable)

• Deductions, carry forward losses, depreciation, etc.

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📉 Audit Triggers Under Section 44AB

As a business owner, you should also know when tax audit becomes mandatory:

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✅ File Your Business ITR Hassle-Free with SSCOIndia

Filing business ITR is NOT just a formality — it directly affects:

• Your ability to apply for business loans

• Comply with GST and ROC filings

• Avoid notices under Section 142(1) or scrutiny

At SSCOIndia.com, we:

• Help you choose between ITR-3 vs. ITR-4

• Handle book-keeping, P&L, depreciation

• Check audit applicability

• File accurately with maximum deductions

📢 Don’t risk an audit or penalty — let SSCOIndia handle your business ITR end-to-end. Book your filing today.

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ITR Form for Capital Gains, Rental Income & Multiple Income Sources

Do you earn from stock trading, property sale, or mutual funds in addition to salary or freelancing? Then filing ITR is not just about your job — it’s about declaring capital gains, rental income, and other earnings in the correct form.

Let’s understand which ITR form applies when you have multiple income sources.

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👉 ITR-2 for Capital Gains + Salary or House Rent

Use ITR-2 if you’re a:

• Salaried individual

• Who also earns from short-term or long-term capital gains

  • Sale of mutual funds

  • Stock market shares

  • Cryptocurrency

  • Gold or jewellery

• Rental income from more than one house

You must use ITR-2 if you sold any capital asset in FY 2024-25 — even if the profit is small.

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👉 ITR-3 for Business + Capital Gains

If you're a business owner, freelancer, or consultant who also:

• Invests in stocks

• Sells property

• Earns interest or rent

Then you must file ITR-3, since you have business + capital gains income.

📌 Example:

• A consultant earning ₹12L from freelancing and ₹1L from selling mutual funds → ITR-3

• A shop owner who also rents out a property → ITR-3

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🏠 Reporting Rental Income

Rental income falls under "Income from House Property". You can:

• Claim standard deduction of 30%

• Deduct municipal taxes

• Deduct home loan interest (up to ₹2L for self-occupied)

Even if you’re salaried and have a second flat rented out, switch from ITR-1 to ITR-2.

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📄 Documents Needed for Accurate Filing:

• Capital gains statements from broker or CAMS/Karvy

• Property sale/purchase documents

• Rent receipts or rental agreement

• Form 16, 26AS, and AIS

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✅ Let SSCOIndia Handle Your Complex ITR

Multiple income sources = more chances of errors.

That’s where SSCOIndia.com comes in:

• We check each income source across Form 16, 26AS & AIS

• Accurately calculate capital gains (LTCG, STCG)

• Apply all eligible exemptions (Section 54, 80C, etc.)

• Ensure zero mismatch filing to avoid notices

📢 Whether it's rental, stock trading, or property sale — SSCOIndia will help you file a clean, compliant ITR.

Common Mistakes While Selecting ITR Form

Filing the wrong ITR form is one of the biggest mistakes taxpayers make — and it often results in rejection of your return, notice under Section 139(9), or delay in refunds. Here are some of the most common ITR form errors to avoid in FY 2024–25:

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❌ Filing ITR-1 with Two House Properties

Many salaried employees mistakenly file ITR-1 even if they own more than one house property (including vacant or let-out).
🔍 Correction: If you have income from two properties, you must use ITR-2.

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❌ Using ITR-4 with Turnover Above Limits

ITR-4 under the presumptive scheme (44AD/44ADA) is only for small businesses and professionals with:

• Turnover < ₹2 crore (business)

• Gross receipts < ₹50 lakh (profession)

If you exceed these limits and still file ITR-4, your return is likely to be flagged.

🔍 Correction: Use ITR-3 or ITR-5/6 based on your structure.

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❌ Freelancers Filing ITR-1

Freelancers and consultants often think they can file as salaried individuals and use ITR-1.
That’s incorrect. Income from professional services, client payments, or consultancy must be filed under ITR-3 or ITR-4, not ITR-1.

🔍 Correction:

• Use ITR-4 if under presumptive scheme (Section 44ADA)

• Use ITR-3 if claiming business expenses or income exceeds limit

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❌ Ignoring Crypto, ESOPs, or Capital Gains

If you’ve:

• Traded cryptocurrency

• Earned from foreign shares or RSUs/ESOPs

• Sold mutual funds, stocks, or property

You cannot use ITR-1 or ITR-4. You must declare these incomes under ITR-2 or ITR-3 as applicable.

📌 Reminder: Hiding or ignoring such income can lead to penalties under Section 270A and notices from Income Tax Department.

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✅ Smart Tax Filing Starts with the Right ITR Form

Filing the correct ITR form is not just about ticking boxes — it’s about:

• Faster refund processing

• Avoiding scrutiny

• Maintaining long-term tax compliance

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Need Help Choosing the Right ITR Form?

Choosing the right ITR form can feel like solving a maze — especially if you have multiple income sources, business earnings, foreign assets, or deductions.

That’s why SSCOIndia.com is here to help.

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What Can SSCOIndia Do for You?

🔍 1. Help Identify the Correct ITR Form
We review your income profile — salary, freelancing, capital gains, crypto, rent — and tell you exactly which form to file (ITR-1 to ITR-7).

📊 2. Review Form 26AS, AIS & TIS
Our experts match income from:

• Employer Form 16

• Bank interest

• Client payments

• Mutual fund sale/redemption

• Stock or crypto platforms

So that nothing is missed or misreported.

📥 3. Accurate and Timely Filing
We file your return error-free, using our proprietary checklists for deductions, investments, and compliance — ensuring maximum refunds and minimum risk.

📢 Filing the wrong ITR form = rejection + refund delays
SSCOIndia makes sure you get it right the first time.

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🧑‍💼 Already Filed But Chose the Wrong Form?

We also help with:

• Revised returns (before Dec 31)

• Response to defective return notices

• Tax planning for next year

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Conclusion + ITR Filing Deadline Reminder

Let’s quickly recap:

✅ Selecting the correct ITR form is essential for:

• Claiming refunds

• Avoiding notices

• Ensuring smooth and fast processing

❌ Filing the wrong form can lead to:

• Defective return notices

• Refund delays

• Compliance issues

🗓️ ITR Filing Deadlines for FY 2024–25 (AY 2025–26)

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📢 Final CTA

🧾 Confused about your ITR Form? Filing multiple incomes? Crypto? Rental? Business?

Let the experts at SSCOIndia.com help you choose and file the correct ITR form — and get your tax return accepted quickly.

📌 Avoid penalties. Claim refunds. File right — the first time.

👉 Book Your ITR Filing Now with SSCOIndia