Which ITR Form Should a Salaried Person File in India?

If you’re a salaried person in India, there’s one big question that pops up every year around tax season:

“Which ITR form should I use to file my return?”

Let’s make this super simple for you. There is no jargon or confusion — just clear information based on what the Income Tax Act says.

What is ITR?

ITR stands for Income Tax Return — a form you file every year to declare your total income, deductions, and tax paid.
Filing ITR is not just a legal responsibility under the Income Tax Act, 1961 — it’s also helpful when applying for loans, visas, or claiming refunds.

The Income Tax Act & Salaried Employees

Under the Income Tax Act, income from salary is considered under “Income from Salaries” — one of the five heads of income. The ITR form you choose depends on your total income, its sources, and a few other conditions.

Let’s look at your options:

1. ITR-1 (Sahaj) – For Most Salaried Individuals

As per Rule 12 of the Income Tax Rules, you can file ITR-1 if:
• You are a resident individual
• Your total income is up to ₹50 lakh
• Your income includes:
• Salary or pension
• Income from one house property (excluding cases with losses)
• Income from other sources (like interest from savings account or FD)

You should not use ITR-1 if:

• You are a director in a company
• You have foreign assets or foreign income
• You have capital gains
• You have income from more than one house property
• You have income from a business or profession

In simple words:
If you are a salaried employee with basic income sources (salary + savings interest + one home), and your income is under ₹50 lakh, then ITR-1 is the form for you.

2. ITR-2 – For Higher Income or Additional Sources

You must use ITR-2 if:
• Your total income exceeds ₹50 lakh
• You earn from:
• More than one house property
• Capital gains (example: selling stocks or property)
• Foreign income or own foreign assets
• You are a director in a company
• You hold unlisted shares

In simple words:
If you’re salaried but have extra sources of income, foreign holdings, or capital gains, ITR-2 is the correct form as per the law.

3. ITR-3 – For Salary + Business/Professional Income

ITR-3 is meant for individuals who:
• Earn business or professional income, along with a salary
• Are partners in a firm

You’ll use this only if you are also a consultant, freelancer, or run a side business.