Archive · 20 May 2025
ITR-1 vs. ITR-4: Choosing the Right Income Tax Form
Choosing the right tax form can be tricky!
Imagine ITR-1 (Sahaj) is for people with simple incomes, like from a job or pension, up to Rs 50 lakh.
If you have a small business or freelance, ITR-4 (Sugam) is your pick, especially if you use a special tax plan.
Both forms work if you made money from stocks and mutual funds (LTCG) up to Rs 1.25 lakh.
Make sure to pick the right form based on your income to avoid problems with the tax department.
ITR-1 (Sahaj) is for those with income up to Rs 50 lakh from salary, pension, a single house property, and other sources.
ITR-4 (Sugam) is for those with income up to Rs 50 lakh opting for presumptive taxation schemes, including small businesses and freelancers.
ITR-1 is not for those with capital gains (other than under Section 112A), business/professional income, or agricultural income over Rs 5,000.
ITR-4 is suitable for those earning from presumptive business/professional income, plus income from salary, pension, a single house property, and other sources.
Both forms now allow reporting of long-term capital gains (LTCG) under Section 112A up to Rs 1.25 lakh.
- Who
- Taxpayers in India
- What
- Differences between ITR-1 (Sahaj) and ITR-4 (Sugam) income tax forms.
- When
- Published May 20, 2025
- Where
- India
- Why
- To help taxpayers choose the correct income tax return (ITR) form, avoiding errors and penalties.
- Form for
- ITR-1 (Sahaj)
- Form for
- ITR-4 (Sugam)
- Maximum income for both forms
- Rs 50 lakh
- ITR-1 Income sources
- Salary, pension, single house property, other sources
- ITR-4 Income sources
- Presumptive business income, plus other sources
- LTCG allowed under
- Section 112A
- Maximum LTCG allowed
- Rs 1.25 lakh