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What is ITR-1 and ITR-4?
The most commonly used forms for filing Income Tax Returns in India are ITR-1, ITR-2 and ITR-4, these forms are filed by thousands of taxpayers from all over the country. Where ITR-1 is used by individuals who earn an income through various means, ITR-4, on the other hand, is filed by those taxpayers who have opted for the Presumptive Taxation Scheme under Section 44AD, 44ADA and 44AE of the Income Tax Act, 1961
What is the difference between ITR-1 and ITR-4?
| Basis for Comparison | ITR-1 | ITR-4S |
| Meaning | Return filing for individuals who derive their income from salary, rent and/or interest | Return filing form for those who opt for the Presumptive Taxation Scheme and also derive their income from salary, rent and/or interest |
| Applies to | Individual | Individual and/or HUF (Hindu Undivided Family) |
| Heads of Income covered |
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Who should File ITR 1?
ITR-1 is commonly known as Sahaj form which is filed solely by an individual. Any other assessee will not be able to avail ITR-1 to file their IT Return. ITR-1 is applicable to the following taxpayers –
- Derive income from salary or pension.
- Earn income from a single house property.
- Have no income from any other businesses or sale of any assets (capital gains).
- Do not own any property or assets in any other country besides India.
- Do not derive income from any other country besides India.
- Earns an agricultural income below Rs.5,000.
- Derive income from different investments or sources such as Fixed Deposits, Investments, Shares, etc.
- Do not have any income from winnings on lotteries or race horses.
- Wish to club their income with a spouse or minor child as long as the income to be clubbed meets the criteria mentioned above.
Who is eligible to file ITR-4?
Here is the list of taxpayers who are eligible to file ITR-4: -
- Earn income from a business.
- Derive income from one house property.
- Do not earn any income from capital gains.
- Agricultural income is below Rs.5,000.
- Do not derive income from any other country besides India.
- Do not incur any income from countries outside India.
