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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

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📞 Call: 7276373037

📧 Email: ajaytaware76@gmail.com

Let me handle your taxes while you focus on your work and business!