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ITR4: Detailed guide
Taxpayers who elect to use one of the presumptive income schemes provided under Section 44AD, Section 44ADA, or Section 44AE of the Income Tax Act mu…

Taxpayers who elect to use one of the presumptive income schemes provided under Section 44AD, Section 44ADA, or Section 44AE of the Income Tax Act must use Form ITR-4 to file their income taxes.

If an individual or Hindu Undivided Family (HUF) has income from a business or profession, then they must file their taxes using the form ITR-4. It is also called "Sugam" or "ITR4-Sugam"

Eligibility to file ITR-4 form

The following is a list of individuals who are qualified to submit an ITR-4. If you fit into this category, you need to file your tax returns using the ITR-4 form. Individuals or Hindu Undivided Families that are RNOR (resident other than not ordinarily resident) or a firm that is not a Limited Liability Partnership but is a resident and has an income less than 50 lakhs for the year 2021-22 are required to fill out the ITR-4 tax form. Also, their income comes from the following sources:

Income from a business that is determined by Section 44AD based on a presumption and has a gross turnover of up to 2 crores. On the other hand, under Section 44AE, which refers to income from up to ten goods carriages. Income from a profession that is estimated based on a presumption under Section 44ADA and has a gross income of up to 50 lakhs. Income from salary or pension and one house property The family pension's interest income is taxed under other sources.

Points to Note: Sections 44AD, 44AE, and 44ADA assume that the presumptive income is computed after every loss, allowance, depreciation, or reduction in the Income Tax Act has been taken into account. If the income of a partner or child under 18 is to be added to an assessee's income, and the combined income is less than Rs.50lakhs, then this form should be filed.

Who is not eligible to file ITR-4 for AY 2023-24?

1- A person whose income from salary, house property, or other sources is more than Rs 50 lakh cannot use this form.

2- This form can't be used by someone who is either a director of a company or has invested in unlisted equity shares.

3- The Income Tax Act of 1961 says that the books of an individual, a HUF, or a partnership firm should be assessed under Income Tax Act 1961.

4- An individual who is a Resident but not ordinarily resident (RNOR) can’t file this form.

5- Non-resident individuals should not file this form.

6- Tax-deferred on ESOPs received from employers that qualify as an eligible start-up.

7- Individuals having an agricultural income above Rs 5,000 should not file this form.

ITR-4 Structure

ITR-4 is a four-page form with sections for personal information, income from a company or profession, computation of taxable income, tax deductions, and taxes payments.

PART A - It includes all the general information like name, Date of birth, and address of the taxpayer.

PART B - It indicates the gross income from five sources of income such as salary, house property, and income from other sources.

PART C - This part contains deductions and total taxable income.

PART D - It provides information about tax status and tax computations.

SCHEDULE BP - It shows the details of income from a business or profession.

SCHEDULE IT - This schedule consists of particulars of advance tax and self-assessment tax payments.

SCHEDULE TCS - It mentions the particulars of tax collected at the source.

SCHEDULE TDS-1 - It provides the details regarding tax deduction at source from the salary.

SCHEDULE TDS-2 - This represents the specifics of tax deducted at source on any income source except salary.

Mode of filing ITR-4

The ITR-4 form can be submitted either online or offline. However, if the individual's annual income is greater than Rs.50 lakh, then the individual is required to submit an ITR-3.

Deadline to file ITR-4

For the financial year 2022-23, the deadline for filing ITR-4 is July 31, 2023, for individuals who don't have to go through a tax assessment, while for individuals who have to go through a tax audit, the due date is September 30, 2023.

Documents required to file ITR-4
  • The individual must hold the following documents in hand.
  • TDS certificates
  • Bank statements
  • Balance sheet
  • Profit and loss account
  • Other relevant documents associated with the income from the business or profession.
Penalty for not filing ITR-4 on time

If you don't file ITR-4 on time, you might be subject to fines and interest on the amount of tax you owe.

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