ITR 1 vs ITR 2: Which One You Should File?

4 mins read
by Angel One
Know the differences between ITR 1 vs ITR 2, and choose the right form for accurate tax filing. Understand eligibility, income sources, and filing requirements.

Filing Income Tax Returns (ITR) in India is a mandatory requirement for all entities and individuals (with taxable income) to comply with the tax regulations. Eligible taxpayers are required to report their income accurately by using the appropriate ITR forms.

There are different types of ITR (Income Tax Returns) forms applicable to taxpayers. Picking the right one is important as each form caters to specific income sources and financial situations. ITR 1 and ITR 2 are the two important forms used by individuals. In this article, we will explore the difference between ITR 1 and ITR 2.

What is ITR 1 Form?

ITR 1 (Sahaj) is used by individual taxpayers who have income from salary, one house property, and income from other sources. Their total income should not exceed 50 lakh. This is applicable to both salaried individuals and Non-Resident Individuals (NRI). 

ITR 1 is applicable to you if you meet the following criteria:

  • Income source is salary or pension.
  • Income is from a single property.
  • There can be other sources of income, except activities like horse racing, lotteries, gambling, etc.
  • The individual does not own a property outside India and also doesn’t receive revenue from outside India.
  • The exempt income (e.g. agricultural income) is less than 5,000.  

ITR 1 is not applicable for individuals in the following cases:

  • If you are not an individual taxpayer
  • If your income source is from more than one property or you receive income from other sources like gambling, horse racing, lotteries, etc. 
  • If you earn income through a business or profession
  • If you have incurred losses under income from other sources
  • If you have incurred non-tax-exempted short-term and long-term capital gains
  • If you have exempt income that is more than 5,000

What is ITR 2?

ITR 2 is used by individual taxpayers who have income from salary, more than one house property, capital gains, and income from other sources. It is applicable to individuals and Hindu Undivided Families (HUFs) with total income exceeding 50 lakh.

ITR 2 is applicable for individuals who meet the following criteria:

  • If the individual has an income from salary or pension.
  • If the individual gets income from more than one property. 
  • If the individual receives income from other sources, which includes card games, gambling, horse racing, etc.
  • If the individual has earnings through capital gains. 
  • If the individual wants to claim losses from the previous financial year under income from other sources. 
  • If the exempt income of the individual is more than 5,000. 
  • If the individual holds property or assets outside India.

ITR 2 is not applicable for individuals of the following cases:

  • If the individual is applicable to file ITR 1. 
  • If the individual is an entrepreneur or a HUF where the income source is via a business or job.

ITR 1 vs ITR 2

Here are a few points that clearly describe the difference between ITR 1 and ITR 2.

Details ITR 1  ITR 2
Applicant  Individuals – Resident or Non-Resident  Individuals – Resident,  Non-Resident and HUFs
Income from salary or pension Up to 50 lakh More than 50 lakh 
Income from other sources Excludes activities like gambling, lotteries, horse racing, etc. Includes activities like gambling, lotteries, horse racing, etc.
Exempt Income  Up to 5,000 More than 5,000
Income from Properties Up to 1 house is allowed More than 1 house is allowed

How to File ITR Online?

You can file ITR online by following the steps below: 

  • Visit the official website of the Income Tax Department.
  • Login using your user ID.
  • Go to ‘File’ and select ‘File Income Tax Return’.
  • Select the assessment year and go to the ‘Personal’ section.
  • Select the right ITR form from the list of forms provided.
  • You’ll get your income details pre-entered. Verify the income and tax details available and edit them if needed.
  • Confirm the details entered are correct and submit the form for verification.

Know more about Suggestions for Filling up Your IT Returns


Selecting the correct ITR form is crucial for accurate and timely income tax filing. By understanding which form suits your income sources, you can avoid unnecessary complexities and ensure compliance with tax regulations.

Ensure you have all the income proofs in hand to make the filing process hassle-free. Be well-prepared and file your income tax returns confidently, knowing that you have chosen the right form and gathered all the necessary documents.


What is the primary difference between ITR 1 and ITR 2 forms?

The primary difference is in the types of income sources they cater to. ITR 1 is for individuals with income from salary, one house property, and other sources like interest income. ITR 2 is for individuals and HUFs with income from multiple house properties, capital gains, and foreign assets.

Can a salaried individual use the ITR 2 form instead of ITR 1?

Yes, a salaried individual can use ITR 2 if they have income from multiple house properties or capital gains to report. However, if their income sources align with ITR 1 eligibility, using ITR 1 is more appropriate.

What if I use the wrong ITR form for filing my tax return?

Using the wrong ITR form may lead to discrepancies in the filing process, and the tax return could be considered invalid. It is essential to choose the correct form based on your income sources to ensure accurate and compliant tax filing.

Can I switch from ITR 1 form to ITR 2 form during the filing process?

No, once you begin the e-filing ITR process with a particular ITR form, you cannot switch to another form. It is crucial to choose the right form before starting the filing process.

Is it necessary to attach any documents while filing ITR 1 or ITR 2 online?

Generally, you do not need to attach any documents while filing ITR 1 or ITR 2 online. However, it is essential to keep all supporting documents readily available for future reference or if required by the income tax department during assessment.