ITR-1 vs ITR-4

Tax season is a crucial time for financial planning, offering an opportunity to assess your income, manage taxes, and plan for the future. Filing your Income Tax Return (ITR) accurately is essential to avoid penalties and ensure timely refunds. However, selecting the correct ITR form can be challenging, especially when deciding between ITR-1 and ITR-4.

In this article, we will break down the differences between ITR-1 and ITR-4, their eligibility criteria, and exclusions. Additionally, we will explore how you can make the most of your tax refunds or surplus income by investing in a Bajaj Finance Fixed Deposit (FD), a secure and high-yield savings option offering interest rates of up to 7.30% p.a. for senior citizens. Book FD. 

ITR-1, also known as Sahaj, is a simplified tax return form designed for resident individuals with straightforward income sources. You can file ITR-1 if:

• Your total income is up to Rs. 50 lakh.
• Your income sources include salary, pension, a single house property, agricultural income up to Rs. 5,000, or other sources like interest from savings accounts or fixed deposits.
• You have long-term capital gains (LTCG) under Section 112A up to Rs. 1.25 lakh.

While ITR-1 is suitable for many salaried individuals, certain categories are excluded:

• Non-residents or Resident but Not Ordinarily Resident (RNOR).
• Individuals with total income exceeding Rs. 50 lakh.
• Those with income from more than one house property or business/profession.
• Directors of companies or those with foreign assets or financial interests.
• Individuals with taxable capital gains (other than LTCG under Section 112A up to Rs. 1.25 lakh).

Pro Tip: If your income sources are diverse or exceed the ITR-1 limits, consider parking your surplus funds in a Bajaj Finance FD. With a CRISIL AAA/STABLE rating, it ensures both security and growth for your investments. Open FD Account. 

ITR-4, or Sugam, is a simplified form for individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding LLPs) with income from business or professional activities under the presumptive taxation scheme.

You can file ITR-4 if:

• Your total income is up to Rs. 50 lakh.
• Your income sources include salary, pension, a single house property, agricultural income up to Rs. 5,000, or business/professional income under presumptive taxation schemes (Sections 44AD, 44ADA, or 44AE).

Example: Freelancers or small business owners earning Rs. 35 lakh annually can file ITR-4. The tax refunds or bonuses they receive during tax season can be invested in a Bajaj Finance FD, offering guaranteed returns and flexible tenure options. Invest in FD. 

ITR-4 has its limitations, and it cannot be used by:

• Non-residents or RNOR individuals.
• Those with income exceeding Rs. 50 lakh.
• Individuals with income from more than one house property or non-presumptive business income.
• Directors of companies or those with foreign assets or financial interests.

The table below highlights the primary distinctions between ITR-1 and ITR-4:

Filed your ITR? 

Now maximise your savings by investing in a Bajaj Finance FD. Earn up to 7.30% p.a. on your surplus funds with flexible tenure options. Invest now!

Here is a quick checklist of documents needed for filing these forms:

ITR-1

• Form 16 (salary certificate).
• Investment proof (e.g., premium receipts).
• House rent receipts (if applicable).

ITR-4

• Form 16 and Form 16A.
• Form 26AS and Annual Information Statement (AIS).
• Rental agreements and receipts.
• Bank statements.

Bonus Tip: Bajaj Finance FDs offer seamless KYC onboarding, making it easier to start your investment journey post-ITR filing.

Filing the right ITR form is the first step towards effective financial planning. Whether you are a salaried professional filing ITR-1 or a freelancer filing ITR-4, understanding your eligibility and exclusions is crucial. 

Once your taxes are settled, make the most of your surplus income or refunds by investing in a Bajaj Finance Fixed Deposit. With attractive interest rates of up to 7.30% p.a. for senior citizens, flexible tenure options, and a CRISIL AAA/STABLE rating, Bajaj Finance FDs are the perfect solution for secure and rewarding savings.

Start your investment journey today with Bajaj Finance FDs.