ITR-1 vs. ITR-4S — What's the Difference?
By Tayyaba Rehman — Published on December 28, 2023
ITR-1 is an income tax return form for salaried individuals, while ITR-4S, now known as ITR-4, is for businesses under the presumptive income scheme.
Difference Between ITR-1 and ITR-4S
Table of Contents
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Key Differences
ITR-1 and ITR-4S are both income tax return forms used in India, designed to cater to different categories of taxpayers.
ITR-1, often referred to as 'Sahaj', is specifically tailored for salaried individuals. This means individuals who earn a salary or pension, or have income from one house property or other sources, generally utilize ITR-1 for filing their taxes. Conversely, ITR-4S, which was later renamed to ITR-4, is designed for small business owners and professionals who opt for the presumptive taxation scheme.
While ITR-1 is relatively simple and concise, focused primarily on capturing income from salary and reporting basic deductions, ITR-4S encompasses more intricate details pertaining to business income. The presumptive taxation scheme, to which ITR-4S pertains, allows taxpayers to declare income at a predetermined rate, thus eliminating the need to maintain detailed accounts.
One significant characteristic of ITR-1 is its simplicity. It's particularly user-friendly for individuals with no business or professional income. ITR-4S, however, requires more details about business operations, making it comprehensive for those under the presumptive taxation scheme.
In summation, while both ITR-1 and ITR-4S are integral for tax compliance in India, they cater to distinctly different groups: ITR-1 for salaried individuals and ITR-4S for businesses under presumptive taxation.
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Comparison Chart
Primary Users
Salaried individuals
Small business owners & professionals
Complexity
Simple and concise
Comprehensive, detailed for business
Income Source
Salary, one house property, other sources
Business income under presumptive taxation
Known as
Sahaj
Sugam (before being renamed to ITR-4)
Requirement
No business or professional income
Business operations details
Compare with Definitions
ITR-1
Exclusively for those with no business or professional earnings.
Being a bank employee, Arvind always uses ITR-1 for tax filing.
ITR-4S
Simplifies tax filing by eliminating detailed accounts necessity.
For Ramesh's catering service, ITR-4S made tax season less cumbersome.
ITR-1
Designed for tax compliance without business complications.
Since Meena's only income was from her salary and a pension, she filed using ITR-1.
ITR-4S
An income tax form for those under the presumptive taxation scheme in India.
Kabir, a shop owner, filed his returns using ITR-4S due to the simplicity of presumptive taxation.
ITR-1
Known as 'Sahaj', tailored for simple tax situations.
Sneha, a schoolteacher, opted for ITR-1 for its simplicity.
ITR-4S
Previously known as Sugam, tailored for small business owners.
Chitra, owning a boutique, found ITR-4S suitable for her needs.
ITR-1
Captures income from salary, one house property, and other sources.
Having rented out his second home, Vikram couldn't use ITR-1.
ITR-4S
Requires comprehensive business operation details.
Under the presumptive scheme, Sana had to provide business specifics in ITR-4S.
ITR-1
An income tax form for salaried individuals in India.
Raj filed his taxes using ITR-1 since he had only salaried income.
ITR-4S
Designed for professionals and businesses under a specific tax scheme.
The freelance graphic designer, Rohan, decided to use ITR-4S for his tax filing.
Common Curiosities
What do ITR-1 and ITR-4S represent?
ITR-1 is for salaried individuals, while ITR-4S (now ITR-4) is for businesses under the presumptive income scheme.
Who typically uses ITR-1?
Salaried individuals or those with income from one house property or other sources use ITR-1.
Can a business owner with multiple ventures use ITR-4S?
Yes, if they're opting for the presumptive taxation scheme.
Which form is simpler: ITR-1 or ITR-4S?
ITR-1, known as Sahaj, is simpler and tailored for individuals without business income.
Why was ITR-4S renamed to ITR-4?
The renaming was a part of periodic revisions and simplifications of tax return forms by the income tax department.
Which ITR form captures income from other sources?
Both ITR-1 and ITR-4S can capture income from other sources, but the primary focus differs.
Are there any prerequisites to use ITR-4S?
The taxpayer should be under the presumptive taxation scheme to use ITR-4S.
Is the presumptive taxation scheme only for small businesses?
Primarily, yes, but it's subject to turnover and other conditions specified by the tax department.
Do I need detailed accounts for ITR-4S?
No, the presumptive taxation scheme allows taxpayers to declare income at a predetermined rate.
How often are ITR forms revised or updated?
They can be updated periodically, usually annually, based on the income tax department's guidelines.
Can I switch between ITR-1 and ITR-4S year to year?
Yes, based on your income sources and applicability, but ensure you meet the criteria for the form you choose.
Is ITR-1 also known by any other name?
Yes, ITR-1 is often referred to as 'Sahaj'.
Can a salaried individual with a side business use ITR-4S?
Yes, if the side business opts for the presumptive taxation scheme.
Can a freelancer use ITR-4S for filing taxes?
Yes, if they opt for the presumptive taxation scheme.
Which form requires more detailed information on income and deductions: ITR-1 or ITR-4S?
ITR-4S requires more detailed information, especially related to business operations.
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Author Spotlight
Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
