ITR-1 vs ITR-4: Know the Key Differences

Filing your income tax return can be confusing, especially when you have to choose the right form. Two of the most commonly used forms—ITR-1 (Sahaj) and ITR-4 (Sugam)—are designed for different types of taxpayers and income sources. Understanding which form applies to you is crucial for accurate and hassle-free tax filing. In this guide, we break down the key differences between ITR-1 and ITR-4, eligibility criteria, required documents, and who should (or should not) use each form, so you can file your return with confidence.

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Everything You Need to Know About ITR-1

ITR-1, also known as SAHAJ, is a simplified income tax return form designed for individuals with specific types of income. If you earn income from salary or pension, own a single house property, or have income from other sources (excluding earnings from betting, gambling, or lotteries), you are eligible to file ITR-1. This form is also suitable for residential individuals with agricultural income up to Rs 5,000. Furthermore, if you include the income of your spouse or minor child for tax purposes, you can file ITR-1—provided the total income does not exceed Rs 50 lakh.

Documents Required for Filing ITR-1:

• Form 16 (salary certificate)
• Investment payment and premium receipts (if applicable)
• House rent receipts (if applicable)

Who Should NOT Use ITR-1?

You cannot file ITR-1 if any of the following apply to you:

• Total income exceeds Rs 50 lakh
• Agricultural income is over Rs 5,000

You have taxable capital gains other than long-term capital gains under Section 112A, exceeding Rs 1.25 lakh

• Income from business or profession
• Income from more than one house property
• You are the director of a company
• You have invested in unlisted equity shares during the financial year
• You own assets or financial interests outside India, or have signing authority in any foreign bank accounts
• You are a Resident but Not Ordinarily Resident (RNOR) or a Non-Resident
• You have foreign income
• Tax has been deducted under Section 194N
• Payment or tax deduction on ESOPs has been deferred
• You have any brought forward losses or losses to be carried forward under any income head

Still have questions about ITR-1? Check out our detailed guide on ITR 1 to find answers to all your queries and simplify your tax filing process.

All About ITR-4

ITR-4, also known as Sugam, is a tax return form designed for individuals, Hindu Undivided Families (HUFs), and partnership firms earning income from business or professional sources. If you have opted for presumptive taxation under Sections 44AE, 44ADA, or 44AE of the Income Tax Act, 1961, you are required to file your return using the ITR-4 form.

Documents Needed to File ITR-4:

•  Form 16 and Form 16A 
•  Form 26AS and Annual Information Statement (AIS)
•  Housing loan interest certificates
•  Rental agreements and rent receipts
• Bank statements
• Receipts of investment premium payments

Who Should NOT File ITR-4?

You cannot use the ITR-4 form if:

• Your total income exceeds Rs 50 lakh
• You have income from more than one house property
• You own any foreign assets
• You have signing authority on any foreign bank account
• You have income from sources outside India
• You are a company director
• You have invested in unlisted equity shares at any time during the financial year
• You are a Resident but Not Ordinarily Resident (RNOR) or a Non-Resident
• You have foreign income
• You are liable to pay tax on income that is deducted at source in the hands of another person
• Payment or tax deduction on ESOPs has been deferred
• Do you have any brought forward losses or losses to be carried forward under any income head

Want to know more? Click here to read our detailed guide on ITR-4 and understand everything you need to file your return accurately. 

Key Differences Between ITR-1 and ITR-4

ITR-1 and ITR-4 are two of the most commonly used income tax return forms, but they serve different types of taxpayers and income sources. Below is a detailed comparison to help you understand their differences:

For error-free tax filing, every taxpayer should carefully review the provisions mentioned above. One key difference between ITR-1 and ITR-4 is the applicability of the presumptive business scheme—this applies to ITR-4 but not to ITR-1.

Also, make sure to file your ITR within the specified deadline. Failure to do so will attract interest under Section 234A at the rate of 1% per month until the return is filed.

Due Date to File Income Tax Return for AY 2025-2026

Once you’re familiar with ITR-1 and ITR-4 forms, it’s important to know the deadlines for ITR filing. For most taxpayers, the due date to file the Income Tax Return  is 31st July. However, for the Assessment Year 2025-26, this deadline has been extended to 15th September 2025.

For companies, LLPs, and certain individuals whose accounts require auditing before filing, the due date is extended to 31st October 2025.

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Frequently Asked Questions

1. What types of income are excluded from ITR-1?

ITR-1 cannot be used if you have:

• Profits and gains from business or profession
• Capital gains (except Long-Term Capital Gains under Section 112A up to ₹1.25 lakh)
• Income from more than one house property
• Certain other sources of income, such as:
• Winnings from the lottery
• Income from owning and maintaining racehorses
• Income taxable at special rates under sections 115BBDA or 115BBE
• Income to be apportioned under section 5A

2. Do I need to specify the nature of my employment while filing ITR-1?

Yes, you must specify the nature of employment from the following options:

• Central Government Employee
• State Government Employee
• Employee of Public Sector Enterprise (Central or State)
• Pensioner (Central/State/PSU/Other)
• Employee of a Private Sector Organisation
• Not Applicable (for family pension income)

3. If I am under the presumptive taxation scheme (Section 44AD/44ADA), can I claim deductions for expenses or depreciation?

No, under the presumptive taxation scheme, you are not allowed to claim any further deductions for business expenses or depreciation. The law assumes you have already claimed all expenses by declaring profit at the prescribed rate. However, you can still claim deductions under Chapter VI-A (like Section 80C, 80D, etc.).

4. What are the benefits of the presumptive taxation scheme for small businesses?

The presumptive taxation scheme offers several advantages, including:

• No requirement to maintain detailed books of accounts
• For businesses with turnover up to ₹3 crore: You can declare 8% (or 6% for digital payments) of turnover/gross receipts as income under Section 44AD
• For professionals with turnover up to ₹75 lakh: You can declare 50% of turnover/gross receipts as income under Section 44ADA.

5. Can I file ITR-4 if I have opted for the new tax regime?

Yes, you are eligible to file ITR-4 under the new tax regime. However, the presumptive taxation scheme (under Sections 44AD, 44ADA, or 44AE) can only be opted for under the old tax regime.

6. Who cannot file ITR-1?

You cannot file ITR-1 if:

• You are a Resident but Not Ordinarily Resident (RNOR) or a Non-Resident Indian (NRI)
• Your total income exceeds ₹50 lakh
• You have agricultural income exceeding ₹5,000
• You have invested in unlisted equity shares
• You are the director of a company
• You have foreign assets or foreign income
• You have deferred income tax on ESOPs from an eligible start-up
• You have tax deducted under Section 194N

7. What is the difference between ITR-1 and ITR-4?

• ITR-1 (Sahaj) is for salaried individuals and pensioners with income from salary, one house property, or other sources (excluding business/profession).
• ITR-4 (Sugam) is for individuals and HUFs with income from business or profession under presumptive taxation schemes.

8. Is it mandatory to file a tax return if I only have exempt income?

If your total income (including exempt income) is below the basic exemption limit, filing a return is generally not mandatory. However, if you have agricultural income exceeding ₹5,000 or wish to claim a refund, you may need to file an ITR.

9. How do I declare exempt income in ITR-1?

You should declare exempt income under Schedule EI (Exempt Income) in ITR-1, including details such as agricultural income (up to ₹5,000), dividends, and other tax-exempt receipts.

10. What happens if I file the wrong ITR form?

If you file an incorrect ITR form, the Income Tax Department may reject your return or ask you to file a revised return with the correct form. This can delay refunds and compliance.

11. Can I carry forward losses if I file ITR-4 under the presumptive taxation scheme?

No, if you opt for the presumptive taxation scheme, you cannot carry forward business losses to future years.

RENU SURESH Expert

Updated on: July 11th, 2025