Which ITR for Salaried Employees? ITR-1 vs ITR-2 (2026 Guide)
Quick Comparison
| Criteria | ITR-1 (Sahaj) | ITR-2 |
|---|---|---|
| Income limit | Up to Rs 50 lakh | No limit |
| Salary income | Yes | Yes |
| One house property | Yes | Yes (multiple properties too) |
| Capital gains | No | Yes |
| Foreign assets/income | No | Yes |
| Agricultural income > Rs 5000 | No | Yes |
| Director in a company | No | Yes |
| Unlisted shares | No | Yes |
When You MUST File ITR-2
- You sold stocks, mutual funds, or property (any capital gains)
- You have foreign bank accounts, foreign investments, or foreign income
- Your income exceeds Rs 50 lakh
- You own more than one house property
- You're a director in any company
- You hold unlisted equity shares
- Your agricultural income exceeds Rs 5,000
In FY 2025-26, ITR-2 filings jumped 18.4% YoY — driven primarily by salaried employees who started investing in stocks and mutual funds. If you have a Zerodha, Groww, or any demat account with transactions, you almost certainly need ITR-2.
Filing ITR-2: What Extra Information You Need
- Capital gains statement from your broker (consolidated for all trades)
- Mutual fund capital gains statement (available on AMC websites or CAMS/KFintech)
- Foreign asset details for Schedule FA (bank name, country, balance)
- Property sale details (buyer info, sale consideration, indexed cost)
Common Mistake
Filing ITR-1 when you should file ITR-2 is a defective return. The department will issue a Section 139(9) notice asking you to correct and refile. Always check if you have any capital gains or foreign assets before choosing ITR-1.