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Sahaj vs Sugam ITR: What's the Difference?

As the income tax return (ITR) filing season begins, many taxpayers get confused about which form to choose. Two simplified forms often used are:

• ITR-1 (Sahaj) – For salaried individuals

• ITR-4 (Sugam) – For small business owners and professionals

✅ Who Can Use ITR-1 (Sahaj)?

Eligibility:

• Must be a resident individual

• Total income ≤ ₹50 lakh/year

• Income from:

  • Salary or Pension

  • One house property

  • Family pension

  • Agricultural income up to ₹5,000

  • Other sources like:

    • Savings interest

    • Interest on fixed deposits

    • Interest on tax refunds or compensation

You can also club minor/spouse income under certain conditions.

Who cannot use ITR-1:

• Non-resident (NRI) or RNOR

• Income > ₹50 lakh

• Agricultural income > ₹5,000

• Income from:

  • Lottery, betting, or racehorses

  • Capital gains

  • Multiple house properties

  • Business or profession

• Director in a company

• Received ESOP from a startup

• Subject to TDS under Section 194N

✅ Who Can Use ITR-4 (Sugam)?

Eligibility:

• Must be a resident individual, HUF, or firm (non-LLP)

• Total income ≤ ₹50 lakh

• Business or professional income under the presumptive taxation scheme:

  • Section 44AD (small businesses)

  • Section 44ADA (professionals)

  • Section 44AE (transport operators)

• Also applicable if there is income from:

  • Salary or pension

  • One house property

  • Agricultural income up to ₹5,000

  • Interest, family pension, or compensation

Who cannot use ITR-4:

• RNORs and NRIs

• Income > ₹50 lakh

• Agricultural income > ₹5,000

• Director in a company

• More than one house property

• Holding unlisted shares

🧾 Key Takeaway: Which Form to Choose?

Note: Choose the correct ITR form to avoid notices or rejections from the tax department.

Let me know if you'd like a simple checklist or guide to help you file your return accurately.

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