Change in ITR from employee to entrepreneur

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This discussion addresses the crucial question of which Income Tax Return (ITR) form to file when transitioning from employment to full-time entrepreneurship. The user, previously filing ITR-1, now has business income and interest income. Advice suggests filing ITR-4 if eligible for presumptive taxation schemes like Section 44AD or 44ADA, particularly relevant for professions like yoga instruction or life coaching. The need to maintain books of account from the current year onwards is also discussed.

Sneha C

Sneha C (Querist)
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28 July 2022 Hi,

I was employed till 2020 and was filing ITR 1. Now I am a full-time entrepreneur and have income from my venture and interest income. I have not maintained books of Account so far.

1. Which ITR should I file from the current year onwards? ITR 3 or 4?

2. Should I maintain books of account from the Current year onwards? If Yes, then can I include all the previous assets (stridhan etc)? Will that have any impact?

Request for a prompt response, since we are left with just 3 days for ITR Filing.

Thanks.