Filing of ITR 4 instead of ITR 1

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An individual who previously filed Income Tax Returns (ITR) using ITR 1 while employed is now working as a freelance insurance agent on a commission basis. They are unsure if they can switch to filing ITR 4 for the current financial year, as their income has exceeded the exemption limit and they have TDS to claim. Experts advise that ITR 1 is for salaried individuals, and ITR 4 is for presumptive income schemes, neither of which applies to commission income. Therefore, the correct form to file is ITR 3.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)
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25 June 2022 Sir,

I have filed my Income tax return for the FY 2016 - 17 and 2017 - 18 tru ITR 1 since I was
employed. Later on, I came out of my employment and currently I am free lance Insurance agent and I am doing it on Commission / Incentive basis. Not a regular employee.

For the past 3 years, I did not file ITR since my income was within the threshold limit. But this year ( FY 21 22), my income has crossed basic exemption limit and also, there is TDS amount deducted from me, which I have to get refund.
Since I am not a regular employee now, can I switch over from ITR 1 to ITR 4 ? Is this form acceptable for those who get Commission / Incentive income ?

Pls. Advice.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 June 2022 ITR 4 not acceptable for commission income. File ITR 3.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)
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25 June 2022 Thank you so much Sir.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)
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25 June 2022 Thank you so much Sir.

CA Puja Sharma

CA Puja Sharma (Expert)
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25 June 2022 ITR 1 is only applicable for salaried taxpayers along with other sources.
ITR 4 is applicable in case you will report the income under the presumptive scheme. Commission income cannot be reported under the presumptive scheme.
So you will be required to file ITR 3.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)
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25 June 2022 Thank you Experts for your kind advice.

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