LTCG now allowed in ITR-1 and ITR-4 — From AY 2026-27, long-term capital gains from listed shares and equity mutual funds up to Rs 1.25 lakh (with no brought-forward losses) can be reported in ITR-1. Many salaried investors with modest SIP redemptions can now stay on ITR-1.
ITR-4
LTCG now allowed in ITR-4 — From AY 2026-27, ITR-4 filers (presumptive scheme) can also report LTCG from listed shares or equity mutual funds up to Rs 1.25 lakh — without being forced to switch to ITR-3. Previously, any capital gains required ITR-3.
Common Scenarios
ITR-1
Salaried with FD interest and SIP redemptions — Salary, FD interest, and LTCG from equity SIP redemptions below Rs 1.25 lakh qualifies for ITR-1 from AY 2026-27.
ITR-2
Salaried who sold a flat — Any property sale generates capital gains that must be reported in ITR-2, regardless of whether the gain is taxable.
ITR-3
Professional exceeding 44ADA threshold — An architect or CA whose gross receipts exceed Rs 75 lakh cannot use the presumptive scheme (Section 44ADA) and must maintain full books of accounts and file ITR-3.
ITR-4
Doctor or small shopkeeper under 44AD/44ADA — A general practitioner with receipts under Rs 75 lakh (95% digital) can declare 50% as income and file the simplified ITR-4.
ITR-2
HUF with rental income — A HUF cannot file ITR-1. The minimum form for any HUF is ITR-2, even for simple rental or interest income.
Frequently Asked Questions
Can I file ITR-1 if I have capital gains from selling stocks?
From AY 2026-27, yes — if the LTCG from listed shares or equity mutual funds is up to Rs 1.25 lakh with no brought-forward or carry-forward losses. Any other capital gains (property, crypto, debt funds, or LTCG above Rs 1.25 lakh) require ITR-2.
Which ITR form should I file if my salary is above Rs 50 lakh?
If your total income exceeds Rs 50 lakh, you must file ITR-2 (if no business income) or ITR-3 (if you have business income). ITR-1 and ITR-4 are both restricted to total income up to Rs 50 lakh.
What is the difference between ITR-3 and ITR-4?
ITR-4 (Sugam) is for taxpayers using the presumptive taxation scheme — income is declared as a fixed percentage of turnover or gross receipts with no detailed books required. ITR-3 is for those who maintain full books of accounts or are subject to a tax audit.
Can an NRI file ITR-1?
No. ITR-1 is exclusively for Resident Ordinarily Resident (ROR) individuals. NRIs must file ITR-2 (no business income in India) or ITR-3 (business income); they cannot file ITR-4, which is restricted to residents. RNORs also cannot file ITR-1, but they are still classified as residents and can file ITR-4 if they use the presumptive scheme — or ITR-2/ITR-3 otherwise.
Which ITR form should a HUF file?
A HUF cannot file ITR-1. The minimum form for a HUF is ITR-2 (for non-business income). If the HUF has presumptive business income under 44AD, it can file ITR-4. For regular business income, ITR-3 applies.