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

Introduction

Filing an income tax return can be challenging, especially when it comes to selecting the correct form. ITR-1 (Sahaj) and ITR-4 (Sugam) are among the most commonly used return forms, but each is meant for a different category of taxpayers and income types. Choosing the right one is essential to ensure accurate and smooth tax filing.

In this guide, we explain the key differences between ITR-1 and ITR-4, including eligibility conditions, required documents, and who should—or should not—use each form, so you can file your return confidently and without errors.

Everything You Need to Know About ITR-1 (Sahaj)

ITR-1, commonly known as Sahaj, is a simplified income tax return form meant for individuals with limited and straightforward income sources. You are eligible to file ITR-1 if your income consists of salary or pension, income from a single house property, or income from other sources such as interest—excluding winnings from lotteries, betting, or gambling.

Resident individuals with agricultural income up to ₹5,000 can also use this form. In addition, ITR-1 allows you to include the income of your spouse or minor child, provided the total income does not exceed ₹50 lakh.

Documents Required for Filing ITR-1

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

Who Should NOT File ITR-1?

You cannot use ITR-1 if any of the following apply:

Total income exceeds ₹50 lakh
Agricultural income is more than ₹5,000
You have taxable capital gains other than long-term capital gains under Section 112A exceeding ₹1.25 lakh
You earn income from business or profession
You own more than one house property
You are a director in a company
You have invested in unlisted equity shares during the financial year
You own foreign assets, have foreign income, or hold signing authority in a foreign bank account
You are a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR)
Tax has been deducted under Section 194N
ESOP taxation has been deferred
You have brought-forward losses or losses to be carried forward under any income head

Still unsure about ITR-1? Explore our detailed ITR-1 guide to clear all your doubts and simplify your tax filing.

All About ITR-4 (Sugam)

ITR-4, also known as Sugam, is designed for individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding LLPs) earning income from business or profession under the presumptive taxation scheme. If you have opted for presumptive taxation under Sections 44AD, 44ADA, or 44AE of the Income Tax Act, 1961, you must file your return using ITR-4.

Documents Required for Filing 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
Investment and insurance premium receipts

Who Should NOT File ITR-4?

You cannot file ITR-4 if:

Total income exceeds ₹50 lakh
You have income from more than one house property
You own foreign assets or have signing authority in a foreign bank account
You earn income from outside India
You are a company director
You have invested in unlisted equity shares during the financial year
You are a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR)
You have foreign income
You are liable to pay tax on income that is taxable in another person’s hands
ESOP taxation has been deferred
You have brought-forward losses or losses to be carried forward under any income head

Want a deeper understanding? Read our comprehensive guide on ITR-4 to ensure accurate and hassle-free filing.

Key Differences Between ITR-1 and ITR-4

ITR-1 and ITR-4 are among the most commonly used income tax return forms, but they cater to different categories of taxpayers and income sources. The comparison below highlights their key distinctions to help you choose the correct form.

Comparison of ITR-1 and ITR-4

Basis of Comparison	ITR-1 (Sahaj)	ITR-4 (Sugam)
Applicability	Individuals with total income up to ₹50 lakh	Individuals and HUFs with total income up to ₹50 lakh
Primary Income Type	Salary or pension	Business or professional income under presumptive taxation (Sections 44AD, 44ADA, 44AE)
Other Allowed Income	Interest from savings accounts, deposits, etc.	Interest from savings accounts, deposits, etc.
	Income from a single house property	Income from a single house property
	Interest on income tax refund	Pension income
	Long-term capital gains under Section 112A up to ₹1.25 lakh	Long-term capital gains under Section 112A up to ₹1.25 lakh
Heads of Income Permitted	Salary, one house property, other sources	Salary, presumptive business/profession income, one house property, other sources

Who Cannot File ITR-1?

You cannot use ITR-1 if:

Total income exceeds ₹50 lakh
Agricultural income is above ₹5,000
You have taxable capital gains (except LTCG under Section 112A up to ₹1.25 lakh)
You earn income from business or profession
You own more than one house property
You are a company director
You own foreign assets or have foreign income
You have invested in unlisted equity shares
You are a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR)

Who Cannot File ITR-4?

You cannot use ITR-4 if:

Total income exceeds ₹50 lakh
You have income from more than one house property
You have carry-forward losses from previous years
You hold signing authority in a foreign bank account
You own foreign assets or earn foreign income
You are a company director
You have invested in unlisted equity shares
You are a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR)
You have taxable capital gains (except LTCG under Section 112A up to ₹1.25 lakh)

Important Takeaway

The key distinction between ITR-1 and ITR-4 lies in presumptive taxation.

ITR-4 applies to taxpayers opting for the presumptive business or profession scheme.
ITR-1 does not allow business or professional income.

Carefully reviewing eligibility criteria before filing is essential for error-free tax compliance.

Due Date for Filing Income Tax Return – AY 2025-26

Individuals (non-audit cases):
15 September 2025 (extended from 31 July)
Companies, LLPs, and audit cases:
31 October 2025

Filing after the due date attracts interest under Section 234A at 1% per month until the return is filed.

Simplify Your ITR Filing with Auriga Accounting pvt. ltd.

Filing your Income Tax Return doesn’t have to be stressful. Auriga Accounting pvt. ltd. offers expert support, accurate filing, and timely submission—right from your home.

Whether you’re filing ITR-1, ITR-4, or any other return, Auriga Accounting pvt. ltd. ensures a smooth, hassle-free experience.

Don’t wait until the last minute—file your ITR with Auriga Accounting pvt. ltd. today and stay stress-free!