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

@ 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.

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?

@ 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.

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?

@ Sandeep Gunalan

As I already said, if the additional tax payable is less than 10K, then there should not be any penalty.

Thank You so much for the clarification sir.

The form depends on your income sources. If you have only salary, one house property, and savings interest with no capital gains, ITR-1 (Sahaj) works. If you have capital gains from shares or mutual funds, you need ITR-2.

 If you have business or professional income and want to use the presumptive scheme (Sections 44AD or 44ADA), ITR-4 (Sugam) applies.

 If your business income exceeds the presumptive limits or you have foreign assets, use ITR-3. If you share which income types you have, happy to confirm the right form.

ITR-1 is for salaried income only - it cannot accommodate professional or consulting income, even small amounts.

You need to revise the return. The form depends on your total consulting receipts in FY 2025-26:
- Receipts under Rs 50 lakh: file ITR-4 using Section 44ADA presumptive taxation. You declare 50% of receipts as profit, no books of accounts required.
- Receipts over Rs 50 lakh, or if you want to claim actual expenses: file ITR-3 instead.

Act on this before July 31. The AIS shows your TDS under 194JB which does not match the income declared in your ITR-1. This mismatch triggers an automated notice under Section 143(1)(a). Filing a revised ITR now is far less painful than responding to that notice later.

This [ITR-4 Sugam filing guide for AY 2026-27](https://taxgarden.in/blog/itr-4-sugam-filing-guide-ay-2026-27) covers the 44ADA calculation and how to report consulting income correctly.