Let’s discuss who can file ITR 1 and 4 and who cannot.
Before starting with the details one must also know that this are the only two forms which can be filled online at the website and submit it and for all other forms you need to either download utility or fill it in software and upload the xml file on website.
ITR 1 Saral:-
ITR 1 is the most simple and small form there are just 3-4 pages which you need to fill where you need to provide details of your salary income, your total salary you can’t add different employers if you work for 2 employers or have changed job in between then you need to provide details of your house property income and then income from other sources and last you need to mention details of exempt income on verification page. Therefore ITR 1 is also called SARAL.
Let’s first understand who are eligible for filing ITR 1:
Assessee type: Resident Individual or HUF
Type of income: Salary income, Income from one house property, Income from other sources, Agricultural income upto Rs. 5,000 and exempt income from capital gain (but I don’t think now there is any exempt income under capital gain).
Now let’s see when you are not eligible to use ITR 1:
Assessee Type: All assessee other than Individual and HUF, also non resident individual and individual who have foreign asset or income.
Type of income: More than one House property, income from lottery or horse race, taxable income from capital gain (even if it’s loss)
Some other important points: If you have any loss under house property which you wish to carry forward and set off then you need to switch to ITR 2. Also if your total income is above Rs. 50 lakh you can’t use ITR 1.
Therefore if you attract any of the above conditions then you need to file ITR 2. Therefore an individual or HUF earning any type of income other than business income can file ITR 2.
ITR 4 Sugam:-
ITR 4 is for the assessee who own a small business and you don’t care about maintaining books of accounts and don’t want that hassle. It is just a 4-5 page ITR form which you file prepare and file online on the website itself and you don’t need any utility or software for filing such return and therefore it is also known as SUGAM.
Who are eligible to file ITR 4:
Assessee Type: Individual, HUF, Partnership Firm
Type of income: Salary income, Income from one House property, Business or professional income under presumptive taxation scheme i.e. 44AD, 44ADA, 44AE, Income from other sources, Agricultural income upto Rs. 5,000 and exempt income from capital gain (but I don’t think now there is any exempt income under capital gain).
Now let’s see when you are not eligible to use ITR 4:
Assessee Type: Other than Individual, HUF and partnership firm i.e. LLP or company, also non resident individual and individual who have foreign asset or income.
Type of income: More than one House property, income from lottery or horse race, taxable income from capital gain (even if it’s loss) or business income which is not as per presumptive taxation scheme.
Some other important points: If you have any loss under house property which you wish to carry forward and set off then you need to switch to ITR 3/5. Also if your total income is above Rs. 50 lakh you can’t use ITR 4.
Earlier till the time capital gain income on long term securities was exempt you could file ITR 1 and 4 if you had such exempt income but now with such income being taxable you cant use them even if your long term capital gain from listed securities is below 1 lakh and not chargeable to tax u/s 112A.
Therefore if you attract any of the above conditions then you need to file ITR 3/5.
