Which Form I have to fill - ITR1 or ITR2

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Hello,

I am salaried person and having a yearly income of 30lacs. I had long term capital gains of 2 lacs from equity stocks along with short term capital gains from debt funds. I also got dividend from stock.

I am confused b/w ITR1 and ITR2 as both mention the capital gains as eligibility. 



Could you please suggest which ITR I have to submit.

Replies (3)
Quick Summary
This discussion clarifies whether to file ITR1 or ITR2 for individuals with salary income and capital gains. If you have long-term capital gains (LTCG) exceeding £1.25 lakh from listed equities, any short-term capital gains (STCG) from debt funds, or dividends, you must file ITR2. ITR1 (Sahaj) is suitable only for residents with simpler income structures, such as salary, one house property, and other sources, provided total income is below £50 lakh and LTCG from equity does not exceed £1.25 lakh.

@ Manish

You have answered your own question in the screenshots you have posted.

Obviously, you have to file using ITR-2, since your LTCG exceeds 1.25 Lakh + you have STCG as well.

The main trigger for switching from ITR-1 to ITR-2 is capital gains. If you sold shares, mutual funds, property, or any capital asset during FY 2025-26, you need ITR-2. Also use ITR-2 if you have more than one house property, income from foreign sources, a directorship, or total income above Rs. 50 lakh. ITR-1 (Sahaj) is for residents with salary, one house property, and other sources like FD interest, all under Rs. 50 lakh.
CBDT notified updated forms for AY 2026-27 with a few changes: https://taxgarden.in/blog/new-itr-forms-ay-2026-27-cbdt-notification-key-changes

The main threshold for AY 2026-27 is Rs 1.25 lakh in long-term capital gains (LTCG) from listed equity shares or equity mutual funds.

Use ITR-1 (Sahaj) if:
- Income from salary, one house property, and other sources only
- LTCG from equity shares or equity MF does not exceed Rs 1.25 lakh in FY 2025-26
- Total income does not exceed Rs 50 lakh
- No business or professional income

You must file ITR-2 if any of the following apply:
- LTCG from listed equity or equity MF exceeds Rs 1.25 lakh
- You have any STCG from shares or mutual funds (any amount triggers ITR-2)
- You hold unlisted shares
- You are a director in any company
- Income from more than one house property
- Foreign income or foreign assets
- TDS deducted under Section 194N (cash withdrawals above threshold)

If you also have business income, it becomes ITR-3, or ITR-4 if you are under presumptive taxation (44AD, 44ADA, 44AE) and total income is within Rs 50 lakh.

For the complete eligibility criteria for all ITR forms AY 2026-27 including the capital gains schedule changes in the new forms, this [ITR forms guide](https://taxgarden.in/blog/new-itr-forms-ay-2026-27-cbdt-notification-key-changes) covers all the conditions with examples.

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