ITR-4 Return Filing

ITR-4 Form (Sugam) – What is ITR-4, Who Should File, Applicability and How to File ITR-4

ITR-4 Form, commonly referred to as the Sugam form, is specifically designed for taxpayers who have opted for the presumptive taxation under Section 44AD, Section 44ADA, and Section 44AE of the Income Tax Act. It is mandatory for eligible taxpayers to complete and submit this form.

However, for businesses with an Annual Turnover exceeding Rs. 2 Crores, ITR-3 should be used. Additionally, depending on individual circumstances, ITR-5 may also be required.

DisyTax offers expert assistance for the ITR 4 income tax return filing. Contact DisyTax today to ensure a smooth and accurate filing process.

Who is Eligible to file ITR 4 Form?

ITR-4 can be filed by a Resident Individual / HUF / Firm (other than LLP) who has:

• Income not exceeding ₹50 Lakh during the FY
• Income from Business and Profession which is computed on a presumptive basis u/s 44AD, 44ADA or 44AE
• Income from Salary/Pension, one House Property, Agricultural Income (up to ₹ 5000/-)
• Other Sources which include (excluding winning from Lottery and Income from Race Horses):
  • Interest from Savings Account
  • Interest from Deposit (Bank / Post Office / Cooperative Society)
  • Interest from Income Tax Refund
  • Family Pension
  • Interest received on enhanced compensation
  • Any other Interest Income (e.g., Interest Income from Unsecured Loan)

Who is not eligible to file ITR- 4 SUGAM Form

ITR-4 cannot be filed by an individual / HUF / Firm (Other than LLP) who:

• is a Resident but Not Ordinarily Resident (RNOR),  or Non-Resident Indian
• has total income exceeding ₹ 50 Lakh
• has agricultural income in excess of ₹5,000/-
• is a Director in a Company
• has income from more than one House Property;
• has income of the following nature:
  • winnings from lottery;
  • activity of owning and maintaining race horses;
  • income taxable at special rates  u/s115BBDA or Section 115BBE;
• has held any unlisted equity shares at any time during the previous year
• has deferred income tax on ESOP received from employer being an eligible start-up
• is not covered under the eligibility conditions for ITR-4

• Additionally, this return form is not suitable for individuals who have any claims related to loss, deductions, relief, or tax credits of the following nature:

Losses incurred in the past or losses intended to be carried forward under the category of “Income from house property.

• Claims for relief under Section 9A, Section 90, or Section 91 of the Income Tax Act.
• Loss under the Income from other sources.
• Claims for deductions under Section 57, except for deductions related to family pension.

• Claims for the credit of tax deducted at source in the hands of any other person.

Documents required for ITR 4 Filing

You will need to keep the below documents ready (as applicable) to file ITR-4:

• Form 16
• Form 26AS & AIS
• Form 16A
• Bank Statements
• Housing Loan Interest Certificates
• Receipts for Donation Made
• Rental Agreement
• Rent Receipts
• Investment premium payment receipts – LIC, ULIP etc.

How to file ITR 4 Form

Step-1: Register or log in to the e-Filing portal using your PAN as user ID.

Step-2: Navigate to e-File and click on Income Tax Return.

Step-3: Choose the ITR-4 form number and Assessment Year from the drop-down menu.

Step-4: Fill in the essential details asked in 4 Parts given below. And calculate the payable tax

Step-5: Pay the final tax liability, if any, and file the income tax return.

Step-6: Verify the ITR using Aadhaar OTP, EVC, or digital signature

ITR-4 Form Structure

The ITR 4 Form filing details into 4 Parts for easy reporting of your Income and tax-related information:

Part A: General Information

This section of ITR 4 form includes your personal details such as name, gender, PAN number, date of birth, income tax ward, address, email address, and mobile number.

Part B: Gross Total Income from the 5 Heads of Income

In this part, you report your Income from various sources categorized into five heads: Income from business, Income from salary or pension, Income from house property, and Income from other sources. By adding all these incomes together, you calculate your gross total Income.

Part C: Deductions and Total Taxable Income

Here, you list the deductions allowed under various sections of the Income Tax Act, such as 80C, 80D, 80E, and others. These deductions are subtracted from your gross total Income to arrive at your total taxable Income.

Part D: Tax Computation and Tax Status

This section involves detailed calculations related to your tax liability. It includes factors like surcharge, relief under section 89, interest under section 234B and 234C, advance tax paid, TCS collected, refund, rebate under section 87A, cess on tax payable, and more. It computes your total tax payable, and if the total tax and interest exceed the taxes paid, it calculates the balance tax due.

For individuals reporting Income from business and opting for the presumptive income scheme under Section 44AD or 44AE, additional information needs to be provided:

• Schedule IT:

   Statement of advance tax and self-assessment tax payment.

• Schedule TCS:

   Statement of taxes collected at source (TCS).

• Schedule TDS1:

   Statement of tax deducted at source on salary.

• Schedules TDS2:

   Statement of tax deducted on Income other than salary.

  Depending on your tax situation, you may also need to fill out supplementary schedules like TDS1, TDS2, IT, and TCS as required.

After completing all the necessary sections and schedules, you must verify and sign the return before submitting it. This ensures the accuracy and legitimacy of the information provided.

Annexure-less Return Form

When using the ITR 4 (SUGAM) return form, taxpayers are not required to upload any additional documents, including TDS certificates.

What is a Presumptive Taxation Scheme?

The presumptive taxation scheme is designed to simplify tax compliance for certain individuals and businesses.

Under Section 44AA of the Income Tax Act, individuals and businesses engaged in specific activities are typically required to maintain detailed accounting records. However, Sections 44AD, 44ADA, and 44AE offer relief to small taxpayers by allowing them to estimate their Income at prescribed rates, reducing the burden of maintaining extensive financial records. Here’s a breakdown of these schemes for users of ITR4:

Presumptive Income & its Taxation – Section 44AD

This scheme allows Resident Individuals, Resident Hindu Undivided Families (HUFs), and Resident Partnership Firms (excluding Limited Liability Partnerships) engaged in certain businesses to calculate their Income on an estimated basis, provided they meet specific conditions.

• Your gross receipts or turnover of the business for which you want to avail of this scheme should be less than Rs 2 crore
• You must be a ‘Resident’ in India. The scheme is not applicable to non-residents.
• This scheme is allowed to an individual, a HUF or a partnership firm. It is not available to a Company or an LLP (Limited liability partnership).
• The scheme cannot be adopted by the taxpayer, if he has claimed a deduction under section 10, 10A, 10B, Section 10BA, or Section 80HH to 80RRB in the relevant year.

Eligible Businesses:-

• The taxpayer may be in any business – retail trading or wholesale trading or civil construction or any other business to avail of this scheme.
• But this method of income computation is NOT applicable to:
  • Income from commission or brokerage
  • Agency business
  • Business of plying, hiring or leasing goods carriage (see section 44AE)
  • Professionals – who are carrying on a profession of legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, an authorized representative, film artist, company secretary and information technology. Authorized representative means – any person, who represents someone, for a fee or remuneration, before any Tribunal or authority under any law. Film Artist includes a producer, actor, cameraman, director, music director, art director, dance director, editor, singer, lyricist, story writer, screenplay writer, dialogue writer, dress designer – basically any person who is involved in his professional capacity in the production of a film.(see Sec 44ADA). These are the professions listed under section 44AA(1)

Deduction for Business Expenses

No business expenses are allowed to be deducted from the net income. Depreciation is also not deductible.

However, in the case of a partnership firm, a separate deduction for remuneration of partners and interest paid to partners is allowed. This must be within the limit specified under section 40(b).

Can the taxpayer declare higher or lower income than 8% of gross receipts?

The taxpayer can voluntarily declare a higher income and pay tax on it. In case the taxpayer chooses to declare lower income than 8% of gross receipts – he shall have to maintain books of accounts and get them audited.

Computing Turnover or Gross Receipts :

Gross receipts or Turnover mean the total collections of the business. The receipts shall be inclusive of GST. The receipts shall also include delivery charges as well as receipts from the sale of scrap.

Discounts given, advances received and money received on the sale of assets should be excluded.

Presumptive taxation under Section 44ADA

The benefit of Presumptive tax rates was only available to businesses. But now this benefit has been extended to professionals also. It will be applicable to the professionals, whose total gross receipts do not exceed Rs 50 lakhs in general or Rs 75 lakhs, if the amount received in cash does not exceed 5% of the total turnover or gross receipts in a financial year..

Presumptive Tax Rate:

The income of the professionals opting for this scheme would be assumed at 50% of the total gross receipts for the year.

Applicability of the scheme:

The scheme is applicable only to a resident assessee, who is an individual, HUF or Partnership and not LLP (Limited Liability Partnership Firm). The persons engaged in the following profession can opt for this presumptive Income scheme:

• Medical
• Engineering
• Legal
• Architectural Profession
• Accountancy Profession
• Technical Consultancy
• Interior Decoration

No requirement for Maintenance of books of Account:

Professionals opting for this scheme need not maintain books of account required under section 44AA. They also need not get the books of account get audited under section 44AB.

Deduction for Business Expenses:�

No business expense is allowed to be deducted from the net income. Depreciation is also not deductible. Even though depreciation is not allowed as a deduction. Written down value (WDV) of the assets shall be considered as if depreciation has been allowed.

Can the taxpayer declare higher or lower income?

The taxpayer can voluntarily declare a higher income and pay tax on it. In case the taxpayer chooses to declare lower income than 50 % of the total gross receipts- he shall have to maintain books of accounts under 44AA and get them audited.

Presumptive taxation under Section 44AE

For those who are in the business of plying, leasing or hiring trucks a scheme similar to the presumptive income scheme under section 44AD is available.

Eligibility Criteria:

• You should be in the business of plying, leasing or hiring goods carriages.
• You should not own more than 10 goods carriages at any time during the year. Include carriages taken on hire purchase or on instalments.
• You may be an individual, HUF, Company or partnership firm

Features of this scheme:

• Net taxable income from a goods vehicle other than heavy goods vehicle (including any goods carriage) will be calculated as Rs 7,500 per month for each vehicle per month or part thereof during the FY in which the vehicle is owned by the assessee.
• The above calculation will be irrespective of heavy goods vehicles (more than 12000 kgs) and light goods vehicles (less than or equal to 12000 kgs).
• The assessee is not required to maintain books of accounts under this business
• The advance tax has to be paid 100% by 15th March for such businesses.

Part of a month shall be rounded off to the next month. For example, if a goods carriage is owned for 9 months and 3 days, the net income shall be calculated as if the carriage was owned for 10 months.

Deduction for Business Expenses:

• No business expenses are allowed to be deducted from the net income. Depreciation is also not deductible.
• However, in the case of a partnership firm, a separate deduction for remuneration of partners and interest paid to partners is allowed. This must be within the limit specified under section 40(b).
• Even though depreciation is not allowed as a deduction is written down value (WDV) of the assets shall be considered as if depreciation has been allowed.

Features of Presumptive Taxation Scheme

• Your Net income is estimated to be 8% of the gross receipts of your business. But from FY 2016-17, if gross receipts are received through a digital mode of payment, then Net Income is estimated at 6% of such gross receipts and for cash receipts. However, the rate is the same at 8% of such cash receipts.
  
  
• You don’t have to maintain books of accounts of this business.
  
  
• You have to pay 100% Advance Tax by 15th March for such a business.
  
  
• No need to comply with the requirement of quarterly instalments due dates (June, Sep, Dec) of advance tax. 
  In the case of Advance Tax, the benefit of paying the advance tax in one instalment by 15th March is only granted for the business for which this scheme has been opted. If the taxpayer has income which is other than from such business, where his tax liability exceeds Rs 10,000 in a year, he has to pay advance tax on such other income
  
  
• You are not allowed to deduct any business expenses against the income.

  If you are running more than 1 business, the scheme has to be chosen for each business. For example, if you run 3 businesses where only 1 is assessed under section 44AD. The relief of not maintaining accounting records & no audit requirement is only applicable to the business to which this scheme applies. For the other 2 businesses which are not covered under this section – the accounting records have to be maintained and an audit is also required.

Why Choose DisyTax for ITR4 Return filing?

• Expert Guidance:Benefit from the expertise of our professionals, who will guide you through the ITR 4 income tax filing process, ensuring accuracy, verifying ITR 4 applicability, and complying with tax regulations.
• Convenience:Enjoy the ease and convenience of our online platform, allowing you to file your ITR4 from the comfort of your home or office. Say goodbye to time-consuming queues and paperwork.
• Accuracy:Our rigorous review process guarantees that your ITR4 return is free from errors, reducing the risk of potential tax-related issues in the future.
• Timely Filing:We understand the significance of filing your taxes on time. With DisyTax, you can be confident that your ITR 4 income tax form will be filed promptly, helping you avoid late fees and Interest and meet tax deadlines.

Contact DisyTax today, and we will assist you at every single stage of the process.

ITR-4 Return Filing FAQ’s

What is ITR-4 (Sugam) Form?

ITR-4 (Sugam) is an income tax return form specifically designed for taxpayers who have opted for the presumptive income scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act.

Who is eligible to file ITR4 (Sugam) Form?

ITR 4 applicability extends to Individuals, Hindu Undivided Families (HUFs), and firms (excluding Limited Liability Partnerships or LLPs) who choose the presumptive income scheme under Sections 44AD, 44ADA, or 44AE.

What is the Presumptive Taxation Scheme?

The presumptive taxation scheme simplifies tax compliance for small taxpayers by allowing them to estimate their income at prescribed rates, reducing the burden of maintaining extensive financial records. Sections 44AD, 44ADA, and 44AE provide relief to eligible taxpayers.

Who is eligible for the Presumptive Taxation Scheme under Section 44AD?

Resident individuals, Resident Hindu Undivided Families (HUFs), and Resident Partnership Firms (excluding Limited Liability Partnerships) engaged in certain businesses can use this scheme to estimate their income, subject to specific conditions.

Who can utilize the Presumptive Scheme under Section 44ADA?

Resident individuals in India who are professionals in fields specified under Section 44AA(1) can use this scheme to estimate their professional income, subject to certain conditions.

What is the eligibility for the Presumptive Scheme under Section 44AE?

This scheme is applicable to individuals, HUFs, firms, and other residents or non-residents engaged in the business of plying, leasing, or hiring goods carriages. They can estimate their income under this scheme, provided they own not more than ten goods carriages during the previous year.

What are the eligibility criteria for using ITR-4 (Sugam) Form?

To use ITR-4 (Sugam), taxpayers must meet specific criteria:

• Total income should not exceed Rs. 50 lakh.
• Income must be derived from specified sources, such as salary, pension, one house property, interest income, presumptive business income (up to Rs. 2 crores), and professional income (up to Rs. 50 lakh).

What types of Income are not eligible for ITR 4 income tax filing?

ITR 4 income tax form cannot be used for income types like profits and gains from certain businesses, more than one house property, capital gains, lottery winnings, owning and maintaining racehorses, and certain other specified incomes.

Can a taxpayer with a loss file ITR-4 (Sugam)?

Taxpayers with certain types of losses, deductions, or tax credits, as specified in the Income Tax Act, are not eligible to file ITR-4 (Sugam).

What is the structure of ITR-4 (Sugam) Form?

ITR-4 (Sugam) consists of four parts:

• Part A: General Information
• Part B: Gross Total Income
• Part C: Deductions and Total Taxable Income
• Part D: Tax Computation and Tax Status

Is the annexure of documents required when filing ITR-4 (Sugam)?

No, taxpayers are not required to attach any additional documents, including TDS certificates, when filing ITR-4 (Sugam).

Why choose DisyTax for ITR-4 (Sugam) filing?

DisyTax offers expert guidance, convenience, accuracy, and timely filing services for ITR-4 (Sugam). Our professionals ensure compliance with tax regulations, making the filing process hassle-free.

Can ITR-4 (Sugam) be filed online?

Yes, you can file ITR-4 (Sugam) online through the official Income Tax Department website or using authorized e-filing intermediaries like DisyTax.

What is the penalty for late filing of ITR-4 (Sugam)?

Late filing of ITR-4 (Sugam) can result in penalties under section 234F, which can be up to Rs. 10,000, depending on the delay.

Can I revise my ITR-4 (Sugam) after filing?

Yes, you can revise your ITR-4 (Sugam) within the specified period if you discover errors or omissions in the original filing.

Are there specific exemptions for professionals under ITR-4 (Sugam)?

ITR-4 (Sugam) does not provide specific exemptions for professionals. However, it is designed for taxpayers who choose the presumptive income scheme, which can simplify tax calculations for professionals.

Is there a difference in the due dates for individuals and businesses filing ITR-4 (Sugam)?

The due date for filing ITR-4 (Sugam) is the same for both individuals and businesses. It depends on whether the accounts are subject to audit.

Can ITR-4 (Sugam) be filed manually, or is e-filing mandatory?

E-filing is mandatory for taxpayers whose accounts are required to be audited under Section 44AB of the Income Tax Act. Others may choose to file manually.