Which ITR Form Should You File If You Have Salary + Business Income?
In today's world, it's common for salaried individuals to have a side hustle – whether it's freelancing, consultancy, online business, or a part-time store. But when it's time to file your Income Tax Return (ITR), confusion arises:
“Which ITR form should I file if I have both salary and business income?”
Let's break it down clearly and simply.
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1️⃣ Understanding Your Income Sources
If your income includes:
Regular Salary Income, and
Additional income from:
Freelancing or consultancy
Commission-based work
Online or offline business
Trading or professional services
Then you fall under the category of "Salaried + Business/Professional Income" taxpayer.
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2️⃣ Which ITR Form Should You File?
✅ ITR-3:
Use this if:
You are running a regular business or profession
You maintain books of accounts
You want to declare actual business expenses
ITR-3 allows you to report:
Salary income
Business/professional income (detailed)
House property income
Capital gains
Other sources
Deductions under Chapter VI-A (like 80C, 80D, etc.)
✅ ITR-4 (Sugam):
Use this if:
You are opting for the Presumptive Taxation Scheme (u/s 44AD, 44ADA)
Your total income (Salary + Business) is below ₹50 lakhs
You don’t want to maintain books of accounts
Under this, you declare a fixed percentage of income (e.g. 50% for professionals under 44ADA), and no expense details are needed.
🛑 Note: ITR-4 cannot be used if:
You have income from more than one house property
You have foreign assets or foreign income
You want to claim capital gains
In such cases, choose ITR-3.
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3️⃣ Benefits of Filing Correct ITR
✔ Avoid notices and penalties from the Income Tax Department
✔ Maintain clean and compliant tax records
✔ Useful for loan approvals, visa processing, or government tenders
✔ Shows your true financial profile to banks and authorities
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4️⃣ Common Mistakes to Avoid
❌ Filing only salary income and hiding business income
❌ Choosing the wrong ITR form (like ITR-1 or ITR-2 for business income)
❌ Not reporting all sources of income
❌ Missing out on eligible deductions and expenses
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5️⃣ Final Word
If you're a salaried person with a side business, it's mandatory to disclose both sources of income. Selecting the correct ITR form – ITR-3 or ITR-4 – is crucial for hassle-free filing and future financial stability.
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Need Expert Help?
I’m Ajay D Taware, a professional tax consultant. I help individuals and businesses with:
ITR Filing
GST Compliance
Business Setup & Advisory
Investment and Loan Assista
nce
📞 Call: 7276373037
📧 Email: ajaytaware76@gmail.com
Let me handle your taxes while you focus on your work and business!
