ITR- 4 Return
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Filing your Income Tax Return (ITR) can be a complex process, especially for those opting for the presumptive income scheme. The ITR-4 form, also known as Sugam, caters to individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding LLPs) whose income falls under Section 44AD, 44ADA, or 44AE. However, navigating the intricacies of tax regulations and ensuring compliance can be time-consuming.
At ReturnFile.in, our team of experienced Chartered Accountants (CAs) simplifies the ITR-4 filing process for you. We understand that every business is unique. Our personalised approach ensures you benefit from accurate income calculations, maximisation of deductions, and minimization of tax liability.
Who Can File ITR-4?
The ITR-4 form, also known as Sugam, is designed specifically for a defined group of taxpayers:
- Individuals: Resident taxpayers with a total income up to Rs. 50 lakh.
- Hindu Undivided Families (HUFs): Applicable to HUFs with a total income up to Rs. 50 lakh.
- Partnership Firms (excluding LLPs): Firms whose total income falls under the eligibility criteria (see below).
Eligibility Criteria Based on Presumptive Income Scheme:
To be eligible to file ITR-4, your income from business or profession must be computed under the presumptive income scheme as per:
- Section 44AD: Applicable to businesses with a turnover of up to Rs. 2 crore (if cash transactions are less than 5%).
- Section 44ADA: For professionals earning up to Rs. 75 lakh in revenues (assuming fewer than 5% of transactions are made in cash).
- Section 44AE: This section caters to taxpayers engaged in the business of plying, leasing, or hiring goods carriages, with a maximum of ten goods carriages during the previous year.
- Your agricultural income should not exceed Rs. 5,000.
- Income from other sources (interest, dividends, etc.) is also permissible within the Rs. 50 lakh total income limit.
Simplifying Taxes With The Presumptive Scheme
The presumptive taxation scheme offers a welcome relief for certain individuals and businesses by streamlining their tax filing process. Under the Income Tax Act, maintaining detailed accounting records is generally mandatory for many taxpayers (Section 44AA). However, Sections 44AD, 44ADA, and 44AE provide an alternative for small taxpayers.
- Section 44AD: This scheme caters to resident individuals, HUFs, and partnership firms (excluding LLPs) engaged in specific businesses. They can estimate their income based on a prescribed percentage of their turnover, subject to certain conditions (e.g., turnover limit of Rs. 2 crore).
- Section 44ADA: This section provides relief to resident Indian professionals in specified fields (listed under Section 44AA(1)). They can estimate their professional income under this scheme, again adhering to certain conditions.
- Section 44AE: This scheme is applicable to a broader range of entities, including individuals, HUFs, firms (excluding LLPs), and residents/non-residents involved in plying, leasing, or hiring goods carriages. They can estimate income under this scheme if they own a maximum of ten goods carriages in the previous year.
Important Considerations for ITR-4 Filing:
Presumptive Income and Deductions: When income is computed under Sections 44AD, 44ADA, or 44AE, it’s assumed to already account for allowable deductions, depreciation, and losses as per the Income Tax Act. However, if you experience losses exceeding the limits set under Section 44AE(3) proviso, filing ITR-5 might be necessary.
Combining Income: If you need to combine your income with another person’s (spouse, minor child), ITR-4 can only be used if their income falls under the eligible categories mentioned earlier (salary, pension, one house property, interest income, presumptive business/profession income).
Who Shouldn't Use ITR-4?
While ITR-4 simplifies filing for eligible taxpayers, it’s not suitable for everyone. Here are some key situations where you might need a different ITR form:
- Company Directors and Unlisted Equity: Individuals who are directors of a company or held unlisted equity shares during the previous year cannot use ITR-4.
- Foreign Assets and Income: Taxpayers with foreign assets, signing authority on overseas accounts, or income from sources outside India require a different ITR form.
- Income Ineligible for ITR-4: ITR-4 filing is not applicable for certain income types, including business/profession income, multiple house properties & capital gains, special income sources, and agricultural income exceeding Rs. 5,000, which are not calculated under Sections 44AD, 44ADA, or 44AE.
- Claims and Deductions Not Covered: ITR-4 does not allow carry-forward of past house property losses or deductions under certain reliefs and deductions, except family pension deductions and tax credit claims deducted at source.
Understanding the ITR-4 Structure
The ITR-4 form, designed for smooth filing under the presumptive income scheme, is structured into clear sections for efficient reporting:
Part A: General Information: This section captures your basic details like name, PAN, address, and contact information.
Part B: Gross Total Income: Here, you report your income from five categories: salary/pension, business or profession (computed under Sections 44AD, 44ADA, or 44AE), house property (limited to one property), other sources (interest, dividends, etc.), and agricultural income (up to Rs. 5,000). The sum of these incomes gives you your gross total income.
Part C: Deductions and Taxable Income: This part allows you to claim deductions under various sections of the Income Tax Act (e.g., 80C, 80D, 80E) to reduce your gross income and arrive at your taxable income.
Part D: Tax Computation and Tax Status: This section involves calculating your tax liability. It considers factors like surcharge, tax reliefs, interest, advance tax paid, and tax deducted at source (TDS/TCS). It ultimately determines your total tax payable and any potential refunds or balances due.
Why Choose Return File ?
Choosing the right partner for your accounting and tax needs is important. At ReturnFile.in, we make things simple and easy for you. Here’s why we’re the best choice:
- Experienced Team: Our team includes expert accountants who have years of experience. They know how to handle everything from taxes to business setup
- Wide Range of Services: We offer many services, like filing your taxes, helping with GST, and making sure your business follows the rules. We can help both businesses and individuals.
- Customized Solutions: We understand that every business is different. We create solutions that match your specific needs and goals.
- Easy and Convenient: Our platform is simple to use. With just a click, you can get all the professional help you need. We serve clients in Ahmedabad and other major cities in India.
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Frequently Asked Questions
Our CAs will review your information and calculations for accuracy before electronically filing your return. We will also keep you informed about the progress and next steps.
Unfortunately, you wouldn't be eligible to use ITR-4 in this scenario. You might need to consider a different ITR form based on your specific income sources. Our CAs at ReturnFile.in can help you determine the appropriate form and guide you through the filing process.
No, ITR-4 cannot be used for joint filing. However, if your spouse's income also falls under the eligibility criteria for ITR-4, they can file a separate return using this form.
ITR-4 is only applicable for income from one house property. If you have income from multiple properties, you'll need to file a different ITR form.
The ability to carry forward past losses depends on the source of the loss and the specific section under which it falls. Our CAs can analyse your situation and advise you on whether you can claim such deductions in your ITR-4 filing.
