Need Help & Clarification in ITR filing : ITR 1 to ITR 4 or ITR 3

ITR 560 views 6 replies

Sandeep Gunalan

7 Points Joined August 2025

I have been filing Income Tax Returns (ITR) for the past two years, primarily under ITR-2, as I am a salaried individual with equity investments. However, for the current assessment year, I filed my return under ITR-1 and have already received the refund.

Upon reviewing my Annual Information Statement (AIS)/Taxpayer Information Summary (TIS), I realized that I overlooked a critical detail:

From April 2024 to January 2025, I was a salaried employee,
But from February 2025 onwards, I have been engaged as a Professional Consultant for a Research Laboratory, and the payment has been reported under Section 194JB (Professional Fees) as business receipts in AIS/TIS

Due to this oversight, I filed the return from a "salaried employee" perspective, ignoring the income reported under Section 194J. The TDS refund related to this income has also been credited.

I now seek your guidance on how to rectify this:

Should I revise my return by switching to ITR-3 or ITR-4, considering the professional income reported under 194J? (based on various internet forum & ITR community many mentioned ITR 4 with sec 24ADA)
Alternatively, can I leave the current ITR as-is and file under the correct form (ITR-4) from the next financial year?
Will this mistake attract any notice, penalty, or compliance issues from the Income Tax Department?

I would greatly appreciate your assistance in helping me complete the necessary corrections or steps, if required.

Replies (6)

Ranjan

970 Points Joined June 2023

@ Sandeep Gunalan

There is a Threshhold under which ITR under business income need not be filed. I think it is 2 Lakh per year. But Google it.

You have worked as a Professional Consultant for only 2 months in FY2024-25 so your business income might be under the Threshhold.

Sandeep Gunalan

7 Points Joined August 2025

Hello Mr. Ranjan,

As per the guidelines available on the Income Tax Department's website, under ITR-4 (Presumptive Taxation Scheme), 50% of income under Section 44ADA (e.g., professional receipts under 194J) can be declared as profit without the need to maintain books of accounts. The remaining portion of income, such as salary, is to be reported as usual, similar to ITR-1 or ITR-2, depending on the case.

In my situation, I received a small amount under Section 194J for two months, but I had already filed my return using ITR-1 as a salaried individual, without realizing this 194J income qualified as business/professional income.

Now, should I revise my return by switching from ITR-1 to ITR-4? Or can I rectify this in the next assessment year?

Ranjan

970 Points Joined June 2023

@ Sandeep Gunalan

Since you have already crossed the line, leave it for the time being and report it in next year's filing, if the additional tax to be paid is less than 10k.

Sandeep Gunalan

7 Points Joined August 2025

Thank you, Mr. Ranjan. When I filed under ITR-1, I received the TDS refund and the process was completed without any errors. If I leave it as it is and avoid revising it, I can ensure to file correctly under ITR-4 from next time.

Just to confirm — this shouldn't result in any notice or penalty, right?