This guide outlines the eligibility and exclusion criteria for filing Income Tax Return (ITR) forms ITR-1 (SAHAJ) and ITR-4 (SUGAM). ITR-1 is suitable for Resident Individuals with a total income up to ₹50 lakh, whose income sources primarily include salary/pension, income from one house property (excluding brought forward losses), income from other sources (like interest), and agricultural income up to ₹5,000. However, individuals who are company directors, hold unlisted equity shares, have business or professional income, possess foreign assets or income, or have capital gains exceeding permitted thresholds (e.g., LTCG under Section 112A over ₹1.25 lakh or with carried forward/brought forward losses) are ineligible for ITR-1. Conversely, ITR-4 is for Resident Individuals, Hindu Undivided Families (HUFs), and firms (excluding LLPs) with a total income up to ₹50 lakh, where income is derived from a business or profession computed on a presumptive basis under Sections 44AD, 44ADA, or 44AE, and capital gains are within the permitted threshold (LTCG under Section 112A up to ₹1.25 lakh with no carried forward or brought forward losses). Those ineligible for ITR-4 include company directors, holders of unlisted equity shares, individuals with income from more than one house property, foreign income or assets, partners in a firm, or those whose income is not computed under the presumptive taxation scheme.
Who Should File ITR-1 (Sahaj)?
Eligible
- Resident Individual with total income up to ₹50 lakh
- Sources of income Include: Salary/ pension, Income from one house property (excluding cases where loss is brought forward), Income from other sources (like interest from savings accounts, fixed deposits, etc.), Agricultural income (up to ₹5,000 only)
Ineligible
- Individual who is director In a company
- Individuals invested in unlisted equity shares during previous year
- Those having income from business or profession
- Residents having foreign assets or foreign income
- Capital gains more than permitted threshold: LTCG under Section 112A more than r 1.25 lakh or haying Cf / bf losses)
Who Should file ITR-4 (Sugam)?
Eligible
- Resident individuals. HUFs and firms (other than LIPS)
- If Total Income is up to T50 lakh, and
- Income is from business or profession computed on presumptive basis U/s 44AD/ 44ADA/ 44AE
- Capital gain less than permitted threshold: LTCG under Section 112A up to 11.25 lakh(with no Cf or DI losses)
Ineligible
- If you are director In a company
- If you hold unlisted equity shares
- If you have Income from more than one house property
- If you have foreign income or assets
- If you are a partner in a firm
- If your income Is not computed under the presumptive taxation scheme
