Choosing the right ITR form is the first step in accurate income tax filing. Filing the wrong ITR can result in a defective return notice from the Income Tax Department. The most commonly confused forms are ITR-1 (Sahaj) and ITR-4 (Sugam) — both meant for simpler categories of taxpayers but with distinct eligibility.
ITR-1 (Sahaj) — Who Should File?
Eligible for ITR-1:
NOT eligible for ITR-1:
❌ Total income > ₹50 lakh
❌ NRI or RNOR
❌ Director in any company
❌ Shareholder in unlisted company
❌ Income from capital gains
❌ Income from business/profession
❌ More than one house property
❌ Foreign income or assets
❌ Agricultural income > ₹5,000
- ▸Resident individual (not NRI or RNOR)
- ▸Total income ≤ ₹50 lakh
- ▸Income sources:
- ▸Salary / Pension
- ▸One house property
- ▸Other sources (interest, family pension, dividends)
- ▸Agricultural income ≤ ₹5,000
ITR-4 (Sugam) — Who Should File?
Eligible for ITR-4:
NOT eligible for ITR-4:
❌ Business turnover > ₹3 crore (unless 95%+ digital transactions)
❌ Professional receipts > ₹75 lakh
❌ Income from capital gains
❌ Foreign assets
❌ Director in company
❌ Carrying forward losses
- ▸Individuals, HUFs, and Partnership firms (not LLPs)
- ▸Resident (not NRI)
- ▸Total income ≤ ₹50 lakh
- ▸Income from business/profession under Presumptive Taxation Scheme:
- ▸Section 44AD: Business income (turnover ≤ ₹3 crore) — 6%/8% of turnover deemed as income
- ▸Section 44ADA: Professional income (receipts ≤ ₹75 lakh) — 50% of receipts deemed as income
- ▸Section 44AE: Goods carriage business
- ▸Plus: Salary, one house property, other sources
ITR-1 vs ITR-4 — Quick Comparison
| Feature | ITR-1 (Sahaj) | ITR-4 (Sugam) |
|---|---|---|
| Business income | ❌ Not allowed | ✅ Presumptive only |
| Salary income | ✅ Yes | ✅ Yes |
| Capital gains | ❌ No | ❌ No |
| Freelancer/professional | ❌ No | ✅ Yes (44ADA) |
| Max turnover | N/A | ₹3 Cr (business), ₹75L (professional) |
| Books of accounts needed | No | No (presumptive) |
| Audit required | No | No (if declaring ≥ 6%/8%/50%) |
Other ITR Forms — Quick Reference
- ▸ITR-2: Individual/HUF with capital gains, foreign income, multiple house properties, income above ₹50L
- ▸ITR-3: Individual/HUF with business/professional income (non-presumptive) — regular books required
- ▸ITR-5: Partnership firms, LLPs, AOPs, BOIs
- ▸ITR-6: Companies (not claiming Section 11 exemption)
- ▸ITR-7: Trusts, NGOs, political parties, research institutions (12A/80G holders)
Conclusion
Salaried individuals with no business income → ITR-1. Freelancers, consultants, and small businesses (under ₹75L / ₹3Cr) using presumptive taxation → ITR-4. For anything more complex — capital gains, NRI, company directorship — use ITR-2 or ITR-3. Biswa Corporate Solutions provides ITR filing for all categories — individual, partnership, LLP, and company.
