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Difference Between ITR-1 and ITR-4S

  • Post last modified:April 9, 2023
  • Reading time:9 mins read
  • Post category:Economics
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  1. 1. Explanation of ITR-1 and ITR-4S
  2. 2. Overview of ITR-1 and ITR-4S
  3. 3. ITR-1
  4. 4. ITR-4S
  5. 5. Difference between ITR-1 and ITR-4S
    1. 5.1. Reference website

Explanation of ITR-1 and ITR-4S

Income Tax Return (ITR) filing is the process of reporting one’s income, tax deductions, and other financial transactions to the government for a specific financial year. The filing of ITR is mandatory for individuals, Hindu Undivided Families (HUFs), and other entities whose income exceeds the minimum taxable limit.The government uses the information provided in the ITR to assess the taxpayer’s tax liability for the year and to determine if the taxpayer has paid the correct amount of tax.

ITR filing also enables the government to track any discrepancies in tax payments and to identify cases of tax evasion. The process of ITR filing involves filling out the relevant ITR form and submitting it to the Income Tax Department either electronically or manually.

The form requires information such as the taxpayer’s personal details, income earned during the year, tax deductions claimed, and tax payments made. It is important to file the ITR accurately and within the due date to avoid penalties and legal consequences. Additionally, filing an ITR is also necessary for availing certain financial benefits such as loans and credit cards, as it serves as proof of income.

Overview of ITR-1 and ITR-4S

ITR-1 and ITR-4S are two types of Income Tax Return (ITR) forms that taxpayers can use to file their returns with the Income Tax Department. ITR-1, also known as Sahaj, is the simplest ITR form, and it is used by salaried individuals or pensioners who have income up to Rs. 50 lakh and have income from sources such as salary, one house property, and other sources like interest income, etc.

It cannot be used by individuals who have income from business or profession or capital gains. On the other hand, ITR-4S is also known as Sugam and is used by individuals, Hindu Undivided Families (HUFs), and partnerships who have opted for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act, 1961.

This scheme is available to taxpayers with gross receipts up to Rs. 2 crores from business or profession, and it assumes a certain percentage of income as the taxpayer’s profit, eliminating the need for a detailed accounting. Taxpayers opting for this scheme are required to file ITR-4S. ITR-1 is used by salaried individuals or pensioners who have income from limited sources, while ITR-4S is used by taxpayers who have income from business or profession and have opted for the presumptive taxation scheme.

ITR-1

ITR-1 is a type of Income Tax Return (ITR) form that is used by salaried individuals or pensioners who have income up to Rs. 50 lakh and have income from sources such as salary, one house property, and other sources like interest income, etc. It is also known as Sahaj and is the simplest ITR form.

Here are some key features of ITR-1:

  1. Eligibility criteria: Individuals who are residents of India and have income from limited sources, such as salary, one house property, and other sources like interest income, etc., are eligible to file ITR-1.
  2. Details required: The form requires basic personal details of the taxpayer, such as name, address, PAN, etc., as well as details of the income earned during the year, tax deductions claimed, and tax payments made.
  3. Types of income covered: ITR-1 covers income from salary, one house property, other sources like interest income, etc. It cannot be used by individuals who have income from business or profession or capital gains.
  4. Limitations: ITR-1 cannot be used by taxpayers who are directors of a company or have invested in unlisted equity shares or have foreign assets or foreign income. Additionally, taxpayers who have more than one house property cannot use ITR-1.
  5. Due date: The due date for filing ITR-1 for the financial year 2021-22 is 31st July 2022. However, the due date may be extended by the Income Tax Department from time to time.

It is important to note that taxpayers should ensure the accuracy and completeness of the information provided in ITR-1 to avoid penalties and legal consequences. Additionally, they should also keep all relevant documents and receipts as proof of the income, tax deductions claimed, and tax payments made.

ITR-4S

ITR-4S is a type of Income Tax Return (ITR) form that is used by individuals, Hindu Undivided Families (HUFs), and partnerships who have opted for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act, 1961. It is also known as Sugam and is a simplified version of the regular ITR forms.

Here are some key features of ITR-4S:

  1. Eligibility criteria: Taxpayers who have opted for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE and have gross receipts up to Rs. 2 crores from business or profession are eligible to file ITR-4S.
  2. Details required: The form requires basic personal details of the taxpayer, such as name, address, PAN, etc., as well as details of the presumptive income earned during the year, tax deductions claimed, and tax payments made.
  3. Types of income covered: ITR-4S covers income from business or profession that is covered under the presumptive taxation scheme. Taxpayers who have income from other sources or capital gains cannot use ITR-4S.
  4. Limitations: Taxpayers who have opted out of the presumptive taxation scheme or have losses from business or profession cannot use ITR-4S.
  5. Due date: The due date for filing ITR-4S for the financial year 2021-22 is 31st July 2022. However, the due date may be extended by the Income Tax Department from time to time.

It is important to note that taxpayers should ensure the accuracy and completeness of the information provided in ITR-4S to avoid penalties and legal consequences. Additionally, they should also keep all relevant documents and receipts as proof of the income, tax deductions claimed, and tax payments made.

Difference between ITR-1 and ITR-4S

ITR-1 and ITR-4S are two different types of Income Tax Return (ITR) forms, and the main differences between them are as follows:

  1. Eligibility criteria: ITR-1 can be used by salaried individuals or pensioners who have income from limited sources, while ITR-4S can be used by individuals, Hindu Undivided Families (HUFs), and partnerships who have opted for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act, 1961.
  2. Types of income covered: ITR-1 covers income from salary, one house property, and other sources like interest income, etc. It cannot be used by individuals who have income from business or profession or capital gains. ITR-4S covers income from business or profession that is covered under the presumptive taxation scheme. Taxpayers who have income from other sources or capital gains cannot use ITR-4S.
  3. Limitations: ITR-1 cannot be used by taxpayers who are directors of a company or have invested in unlisted equity shares or have foreign assets or foreign income. Additionally, taxpayers who have more than one house property cannot use ITR-1. ITR-4S cannot be used by taxpayers who have opted out of the presumptive taxation scheme or have losses from business or profession.
  4. Details required: Both ITR-1 and ITR-4S require basic personal details of the taxpayer, such as name, address, PAN, etc. However, the details required for income, tax deductions claimed, and tax payments made are different, depending on the type of income and the taxation scheme.
  5. Due date: The due date for filing ITR-1 and ITR-4S is the same, i.e., 31st July 2022, for the financial year 2021-22. However, the due date may be extended by the Income Tax Department from time to time.

ITR-1 is used by salaried individuals or pensioners who have income from limited sources, while ITR-4S is used by taxpayers who have income from business or profession and have opted for the presumptive taxation scheme. Taxpayers should carefully consider their eligibility and the type of income before choosing the appropriate ITR form for filing their income tax returns.

Conclusion

Income tax return (ITR) filing is a mandatory requirement for individuals, companies, and other entities in India. There are different types of ITR forms available, such as ITR-1 and ITR-4S, which are designed to meet the specific needs of different taxpayers. While ITR-1 is suitable for salaried individuals or pensioners with limited sources of income, ITR-4S is designed for taxpayers who have opted for the presumptive taxation scheme and have income from business or profession.

Taxpayers should carefully consider their eligibility and the type of income before choosing the appropriate ITR form for filing their income tax returns. It is also important to ensure the accuracy and completeness of the information provided in the ITR form to avoid penalties and legal consequences.

Reference website

Here are some reliable reference websites related to Income Tax Return (ITR) filing and taxation in India:

  1. Income Tax Department: https://www.incometaxindia.gov.in/Pages/default.aspx
  2. TaxGuru: https://taxguru.in/income-tax/
  3. ClearTax: https://cleartax.in/s/income-tax-india
  4. IndiaFilings: https://www.indiafilings.com/learn/category/taxation/income-tax-return/
  5. Investopedia: https://www.investopedia.com/terms/i/incometaxindia.asp

These websites provide useful information about ITR filing, tax laws, rules and regulations, and other relevant topics related to taxation in India.