Updated on: May 23rd, 2023
13 min read
According to the Income Tax Act of 1961, every individual, including salaried and self-employed, must file an Income Tax Return (ITR). Depending on your type of income or category, it is imperative to submit the appropriate ITR form on or before the specified due date. If you choose the wrong form, you must go through the hassle of filing your ITR again.
So, if you are confused between the ITR forms, especially ITR 1 and ITR 4, you can rely on this article. This article will briefly discuss the forms, helping you understand the key differences between the two.
The income tax department mandates every earning individual to file ITR. Take a look at some of the reasons why you should not skip filing the applicable ITR:
So, if your gross income is taxable, it is crucial to file the ITR applicable to you. Depending on your income, there are different ITR forms for different individuals; however, the returns filed by most individuals are ITR 1 (SAHAJ) and ITR 4 (SUGAM). Read on to know the key differences between them.
ITR 1 or SAHAJ is a type of return filing form. If you are an individual earning an income from pension or salaries, single house property or other sources (excluding betting, gambling, and lotteries), you are eligible to file ITR 1 form. Also, for residential individuals having an agricultural income of up to Rs 5000, ITR 1 form is applicable. Additionally, if the income of your spouse or minor is clubbed together, you can also file this particular form. However, it only applies if the income falls under a definite head, as mentioned in ITR 1.
To file ITR 1, you need to keep some documents ready such as Form 16, investment payment premium receipts (if applicable), and house rent receipts (if applicable).
ITR 4 or Sugam is another type of ITR form applicable to individuals, HUFs, and Partnership Firms generating an income from a business or profession. Additionally, if you have chosen presumptive taxation on your business income under Section 44 AE, 44Ada and 44ADA of the Income Tax Act, 1961, you have to file ITR 4 form.
In order to file ITR 4, it is essential to keep the following documents ready: Form 16, Form 16A, Form 26 AS and AIS, housing loan interest certificates, rental agreements, bank statements, rent receipts and receipt of investment premium payments.
Both ITR 1 and ITR 4 are the most commonly used forms when it comes to ITR filing. However, from the above piece of information, it is evident that there are some slight differences. For a more comprehensive understanding, take a look at the table given below:
Basis of comparison
Heads of income
When are you not eligible to file this form?
After knowing about the two types of forms (ITR 1 and ITR 4), it is essential to know about their due dates. The due date to file ITR in the assessment year 2023-24 is 31st July 2023 for the majority of taxpayers. However, for companies, LLPs and some individuals who need to get their accounts audited before filing the return, it is 31st October 2023.
For error-free tax filing, every taxpayer must assess these provisions mentioned above. One of the basic differences between ITR 1 and ITR 4 lies in the presumptive business scheme. This specific provision is applicable to ITR 4 but not ITR 1. At the same time, also ensure to file your ITR within a specified date. If you fail to do so, you will have to pay interest under Section 234A at 1% per month.
Also read about:
1. Which ITR Should I File
2. How to file ITR Online
3. What is ITR 2 Form & How to File ITR-2
4. How to File ITR-2 for Income from Capital Gains FY 2022-23
5. ITR 3 vs ITR 4
6. What is ITR 3 Form & How to File ITR-3
7. How to File and Download ITR-7 Form
8. What is ITR-5 Form, Structure & How to File ITR 5
9. ITR 6