Hi I am Nitin Rajput, I want to know under which ITR will following income come under to file? In hand salary is 12L per annum, company is foreign based, the employee has employment letter. Salary gets credited via authorised indian person in India by employer but salary is paid through UPI transaction person to person. Employee has chats with the owner and authorised person who transfers the salary on salary update as proof. There's no salary payslip, invoice or pf. In which ITR does the said employee has to file? ITR-1 or ITR-4 ? Please let me know, would appreciate your helpful advice.
Hi,
it’s not possible to respond to this without looking at the employment letter and any other document you have. We need to see in the letter whether it is actually an employment or professional services contract.
You may take consultation and share documents over email
Dear Querist,
If there is a genuine employer–employee relationship, the amount is taxable as salary and ITR-1 may be filed, subject to its normal eligibility conditions. Payment through UPI or absence of payslips/PF does not change its nature.
However, if the person is actually working independently as a technical consultant and receives professional fees rather than salary, Section 44ADA may be opted for, subject to eligibility, and ITR-4 can be filed by declaring at least 50% of gross receipts as professional income.
The correct ITR should be selected based on the actual employment agreement and working relationship, not merely the payment description.
For a more detailed review of your case, you may book a phone consultation.
CA Shubham Goyal
Hi Thankyou for your helpful answers, regarding the employment letter, it's actual job employment letter, it's not contractual agreement contract as independant freelancer. Also additional income is saving bank interest which comes at 20,369/- FY 2025-2026. The only confusion was on salary payment method instead through authorised company it's by person here, paying via UPI peer to peer transaction.
Dear Querist,
Since it is a genuine employment and not an independent consultancy, ITR-1 should be filed, not ITR-4. Section 44ADA is not applicable.
Report the gross salary under “Salary” and savings-bank interest of ₹20,369 under “Income from Other Sources,” assuming you are a resident, your total income is below ₹50 lakh, and you have no foreign assets or other foreign income.
Payment through an authorised person via UPI does not change the nature of salary. Keep the employment letter, bank statements and chats as supporting records. If no TDS appears in Form 26AS, pay the applicable self-assessment tax before filing.
For a more detailed review of your case, you may book a phone consultation.
CA Shubham Goyal
Dear Sir,
Hope you are doing well.
Based on the facts provided, the employee should file ITR-1 (Sahaj), not ITR-4. The income is in the nature of salary income, as there is a clear employer–employee relationship supported by a valid employment letter. The mode of salary payment (UPI transfer from an authorised person in India) does not alter the head of income.
Accordingly:
- Salary (₹12 lakh) should be reported under Income from Salary.
- Savings bank interest (₹20,369) should be reported under Income from Other Sources, with deduction under Section 80TTA claimed, if eligible.
You should retain the employment letter, bank statements, UPI transaction records, and relevant communication with the employer as supporting documentation.
Thanks & Regards,
Payal Chhajed
