An individual will file either ITR 1 or ITR 2 depending on the sources of income earned during the financial year. It is important to know the difference between the two income tax return Form Because if ITR is filed using wrong ITR form, it will be called as defective return. The Income Tax Department will send you a tax notice asking you to file ITR using the correct ITR form applicable to your income.

Who is eligible to file using ITR-1?

You can use ITR-1 if you fulfill the following conditions:

a) His source of income should be salary, a house property and other sources of income, i.e. interest income, dividend etc. and agricultural income up to Rs.5,000 only.

b) The total income of an individual should not exceed Rs 50 lakh

c) The person should ordinarily be a resident Indian

If any one of these conditions is not fulfilled then he will not be eligible to file ITR.

Who is eligible to file using ITR-2?

If a person’s income is from sources other than the above or his residential status is different, he has to file income tax return using ITR-2 form.

A person is eligible to file ITR-2 if he fulfills the following conditions:

a) income from salary, one or more house property and other sources of income

b) Have foreign income like dividends from foreign shares etc.

c) is a director of a company

d) is investing in unlisted equity shares

e) holds assets outside India

f) Total income is more than Rs 50 lakh

g) Have a Hindu Undivided Family (HUF)

h) is a non-resident person or a resident individual (both ordinarily or not ordinarily)

i) If there are losses which should be carried forward or brought forward under the head ‘Income from house property’.

However, if a person has more sources of income such as income from business and profession etc. So he cannot file ITR using ITR-1 or ITR-2. He has to file ITR using separate ITR form as applicable to him.

It is important to note that ITR-2 is a much more complex form than ITR-1; ITR-1 is also known as Sahaj as it is a simple ITR form which does not require more information than ITR-2.

An individual can easily file his/her tax return using ITR-1 on the new income tax portal. Most of the information in the ITR-1 form is pre-filled. A person needs to cross-check it from the available documents and file a tax return. At the same time, filing ITR-2 on the new income tax portal is very complicated. Although the information is pre-filled here, the portal asks for answers to certain questions before the commencement of the form and additional details like date of purchase, unit details (in case of capital gains from shares or mutual funds) etc. . ,