Discover ITR Form 1 (SAHAJ) and ITR Form 4 (SUGAM) eligibility. Simplify tax filing by understanding which form fits your income sources and conditions.
Income Tax Return: The filing of income tax returns (ITR) can be confusing with several forms available. Among the various options, ITR-1 (SAHAJ) and ITR-4 (SUGAM) are commonly used by individuals and small businesses.
Are you eligible for ITR Form 1 (SAHAJ) or ITR Form 4 (SUGAM)? These questions often pose a dilemma in the minds of taxpayers.
We’ve tried to make filing your income tax returns easier.
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Who Can Use ITR-1 (SAHAJ) Form?
This form is for individuals with a total income up to Rs. 50 lakhs from the following sources:
Salary/Pension: This includes income earned from employment or pension.
One House Property: Rental income from one house property is allowed (excluding cases with losses carried forward from previous years).
Other Sources: This category includes interest income but excludes lottery winnings, racehorse income, and income taxable under sections 115BBDA or 115BBE.
If you need to club someone else’s income (spouse, minor child, etc.) with yours, you can use this form only if their income also falls under these categories.
Who Cannot Use ITR-1 (SAHAJ) Form?
You cannot use ITR-1 (SAHAJ) if you:
- Are a Non-resident or Not Ordinarily Resident
- Are a Director of a company
- Have a total income exceeding Rs. 50 lakhs
- Earn rental income from more than one house property
- Held unlisted equity shares during the previous year
- Claim deductions under section 80QQB or 80RRB
- Are taxed under section 194N
- Have deferred tax payments under sections 191(2) or 192(1C)
- Claim deductions under section 10AA or Part-C of Chapter VI-A
- Have losses carried forward from previous years
- Claim deductions under section 57 (excluding family pension deductions)
- Want to claim relief under sections 90 or 91
- Want to claim credit for TDS deducted from someone else’s income
- Have assets (including financial interests) outside India
- Have signing authority for accounts outside India
- Have income apportioned under section 5A
Have income from:
- Business or Profession
- Capital Gains
- ‘Other Sources’ taxable at a special rate
- Dividend income exceeding Rs. 10 lakhs (taxable under section 115BBDA)
- Unexplained income (taxable at 60% under section 115BBE)
- Agricultural Income exceeding Rs. 5,000
- Any source outside India
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Who Can Use ITR-4 (SUGAM) Form?
This form is for Individuals, HUFs, and Firms (except LLPs) with income from:
- Business income calculated under sections 44AD or 44AE
- Professional income calculated under section 44ADA
- Salary/Pension
- One House Property (excluding cases with losses carried forward)
- Other Sources (excluding lottery winnings, racehorse income, dividend income exceeding Rs. 10 lakhs, and unexplained income under section 115BBE)
- Similar to ITR-1, clubbed income must also fall under these categories to use this form.
Who Cannot Use ITR-4 (SUGAM) Form?
Similar to ITR-1, several conditions prevent using ITR-4, including:
- Being a Non-resident or Not Ordinarily Resident
- Being a company Director
- Having income exceeding Rs. 50 Lakhs
- Earning from more than one house property
- Holding unlisted equity shares
- Several specific deductions and tax situations
- Having assets or accounts outside India
- Specific income types like capital gains, foreign income, and more
If you maintain books of accounts according to section 44AA, get your accounts audited (section 44AB), and obtain an audit report, filing ITR-4 (SUGAM) is optional. You can use ITR-3 or ITR-5 instead.
