What is ITR-4 Form?

For those who choose the presumptive taxation plan, the ITR-4—also known as Sugam—is a simplified income tax return form. By letting professionals and small companies disclose their income as a fixed proportion of turnover or gross revenues, this program is supposed to simplify compliance for them.

• Designed for individuals, HUFs, and firms (excluding LLPs).
• Available for people with an overall income not exceeding ₹50 lakh.
• Business income: Section 44AD,
  professional income: Section 44ADA,
  transport income: Section 44AE.

Who has to file ITR-4?

The ITR-4 applies to taxpayers with business income under a presumptive taxation regime.

• Hindu Buddhist Sikh HUFs whose father is earning qualified business or professional income.
• Partnership firms (excluding LLPs) opt for presumptive taxes.

Examples of eligible taxpayers:

1. Freelancers (writers, designers, developers) opting for Section 44ADA.
2. Small business owners (shopkeepers, traders) under Section 44AD.
3. Transport operators with goods carriages under Section 44AE.

If you fit into any of these categories and have an annual income below ₹50 lakh, filing ITR-4 is the appropriate choice.

Eligibility Criteria for ITR-4

You can file ITR-4 if you meet the following conditions:

• Income Source:
  • Income from business or profession under the presumptive taxation scheme:
  • Section 44AD: For companies with a turnover less than ₹2 crore.
  • Section 44ADA: For those in the gross receipt bracket up to ₹50 lakh.
  • Section 44AE: For transporters with up to 10 goods vehicles.
    
    
• Total Income: Your total income for the financial year does not exceed ₹50 lakh.
• Other Income Types:
  • Salary or Pension.
  • One House Property.
  • Other Sources (such as interest, dividends, etc.).

Who Cannot File ITR-4?

You are not eligible to file ITR-4 if:

• You have foreign income or assets.
• You are a director of a company.
• You hold shares in an unlisted company.
• You have capital gains or speculative income.
• You have income from more than one house property.
• Gross income from agriculture is more than ₹5,000.

Structure of the ITR-4 Form

• Part A: General Information
  • Name
  • PAN (Permanent Account Number)
  • Aadhaar Number
  • Address
  • Mobile Number and Email
  • Filing Status (original or revised return)
    
    
• Part B: Gross Total Income
  • Income from Business or Profession: Calculated under presumptive taxation.
  • Salary/Pension: If applicable.
  • Income from House Property: Limited to one house property.
  • Income from Other Sources: Interest, dividends, etc.
    
    
• Part C: Deductions and Taxable Income
  • Declare deductions under various sections of the Income Tax Act, including:
  • Section 80C: Investments in PPF, ELSS, life insurance, etc.
  • Section 80D: Health insurance premiums.
  • Section 80G: Donations to charities.
    
    
• Part D: Computation of Tax Payable
  • Tax Payable
  • Advance Tax Paid
  • Self-Assessment Tax
  • Refund or Balance Tax Due
    
    
• Schedules
  • Schedule BP: Details of business/professional income.
  • Schedule IT: Information about advance tax and self-assessment tax paid.
  • Schedule TDS/TCS: Details of tax deducted/collected at source.
    
    
• Verification and Declaration
  • A declaration confirming the accuracy of the information provided.

How to File ITR-4 Online: Step by Step Guide

1. Visit the Income Tax Portal: Open www.incometax.gov.in and log in using your PAN and password.
   
   
2. Select ‘File Income Tax Return’: Choose the assessment year and select ITR-4 as the form.
   
   
3. Fill in Personal Details: Enter your name, address, contact information, and PAN.
   
   
4. Enter Income Details:
   • Business/professional income under the presumptive scheme.
   • Salary, house property, and other income details.
     
     
5. Add Deductions: Enter deductions under Sections 80C, 80D, etc.
   
   
6. Compute Tax: The system will automatically calculate the tax payable or refund due.
   
   
7. Upload and Verify: Verify your return using Aadhaar OTP, Net Banking, or DSC (Digital Signature Certificate).
   
   
8. Submit: Submit the return and download the acknowledgment for your records.

Benefits of Filing ITR-4

1. Simplified Filing Process
2. Lower Compliance Burden
3. Faster Processing
4. Proof of Income
5. Avoid Penalties
6. Claim Refunds
7. Financial History
8. Legal Protection
9. Government Contracts
10. Good Financial Habits

Documents Required for ITR-4 Filing

• PAN Card
• Aadhaar Card
• Bank Statements
• Income Proof
• Form 16/16A
• Investment Proof

FAQ

1. Who must file ITR-4?
Those earning business or professional taxation scheme with income up to ₹50 lakh, individuals HUFs and firms (other than LLPs).

2. What is the presumptive taxation scheme?
A scheme where taxpayers declare income as a fixed percentage of turnover or gross receipts, reducing the need for detailed accounting.

3. Can salaried individuals file ITR-4?
Yes, if they also have business or professional income under the presumptive taxation scheme.

4. What is the income limit for ITR-4?
The total income should not exceed ₹50 lakh in a financial year.

5. What is the difference between ITR-3 and ITR-4?
ITR-3 is for taxpayers with business or professional income not under presumptive taxation, while ITR-4 is for those who choose presumptive taxation.

6. Can I file ITR-4 if I have foreign assets?
No, those with overseas income or assets must report using ITR-2 or ITR-3.

7. What is the penalty for late filing of ITR-4?
Late filing carries a penalty of up to ₹5,000. For income less than ₹5 lakh, the penalty is ₹1,000.

8. Can a freelancer file ITR-4?
Yes, freelancers like writers, designers, or consultants can file ITR-4 under Section 44ADA if their receipts do not exceed ₹50 lakh.