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ITR-1 vs ITR-2: Which Form Should You Use?

Difference Between ITR-1 and ITR-2 Explained

Filing the correct Income Tax Return (ITR) form is crucial to ensure your return is processed smoothly. For salaried individuals and those with limited income sources, ITR-1 and ITR-2 are the most commonly used forms—but choosing the wrong one could lead to rejection or penalties.

So, how do you know which ITR form to file—ITR-1 or ITR-2—for AY 2024–25? Here's a simple breakdown to help you make the right choice.

🧾 What Is ITR-1 (Sahaj)?

ITR-1 is meant for resident individuals with relatively simple income sources.

✔️ Who Can File ITR-1:

  • Resident individuals (not HUF or company)

  • Total income up to ₹50 lakh

  • Income from:

    • Salary or pension

    • One house property

    • Other sources (interest, FD, etc.)

❌ Who Cannot File ITR-1:

  • Individuals with capital gains

  • More than one house property

  • Foreign income or assets

  • Agricultural income over ₹5,000

  • Business or professional income

🧾 What Is ITR-2?

ITR-2 is for individuals and Hindu Undivided Families (HUFs) who don’t have business or professional income but do have complex income types.

✔️ Who Can File ITR-2:

  • Individuals or HUFs with:

    • Salary/Pension

    • More than one house property

    • Capital gains (e.g., shares, mutual funds, real estate)

    • Foreign income or assets

    • Dividend income from domestic/foreign sources

    • Agricultural income over ₹5,000

❌ Who Cannot File ITR-2:

  • Individuals with income from business or profession (they should file ITR-3)

🆚 ITR-1 vs ITR-2: Quick Comparison Table

Feature ITR-1 ITR-2
Income Limit Up to ₹50 lakh No income limit
Salary Income ✅ Yes ✅ Yes
House Property ✅ One property only ✅ Multiple properties allowed
Capital Gains ❌ No ✅ Yes
Foreign Income/Assets ❌ No ✅ Yes
Agricultural Income > ₹5,000 ❌ No ✅ Yes
Business/Professional Income ❌ No ❌ No
Eligible for RNOR/NRI ❌ No ✅ Yes

How to Decide Which One to Use?

Choose ITR-1 if:

  • You're a salaried employee with income under ₹50 lakh

  • You own only one house

  • You have no capital gains or foreign income

Choose ITR-2 if:

  • You’ve sold shares, mutual funds, or property

  • You have more than one house

  • You earn foreign income or have assets abroad

  • Your agricultural income exceeds ₹5,000

  • You're an RNOR or NRI

Still Unsure? Let Filing World Help!

📑 Filing the Right ITR Form Just Got Easier

Filing the wrong ITR form can lead to:

  • Return rejection

  • Delays in refunds

  • Penalties or scrutiny from the IT Department

That’s why Filing World offers expert-assisted filing to help you:

  • Choose the correct ITR form (ITR-1, ITR-2, or others)

  • File accurately with all income sources included

  • Claim full deductions to minimize tax

  • Get peace of mind with CA-reviewed returns

🛡️ Trusted by Individuals Across India

From salaried professionals to investors, we help thousands file correctly—every year.

 

👉 Confused between ITR-1 and ITR-2? Let Filing World handle it. Get Started Here