Income tax return filing can be a complex process, especially for individuals and Hindu Undivided Families (HUFs) who fall under specific business categories. Different entities fill out various forms, one of which is ITR-4.
Here, we’ll explore everything about the ITR-4 form, eligibility criteria, key sections, and the process of filing.
Interim Budget 2023 update
What is the ITR-4?
ITR-4 Sugam is an income tax return form that is used by taxpayers who opt for a presumptive income scheme under sections 44AD, 44ADA and 44AE.
However, if the turnover exceeds Rs.2 crore [Rs.3 crore from A.Yr.2024-25 with some additional conditions], the individual is required to file ITR-3.
Eligibility to file ITR-4?
The below entities must file ITR-4 to avoid penalties and legalities.
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Individual, Hindu Undivided Family (HUF), or partnership firm.
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The taxpayer must be a resident of India as per the Income Tax Act.
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The ones who have opted for the presumptive taxation scheme.
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The total income should not exceed ₹50 lakhs.
Who is not eligible to file the ITR-4 form?
The below category of entities does not require filing an ITR-4 form.
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Individuals who hold signing authority outside India.
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The ones who own a company or who hold unlisted equity shares.
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Individuals with income derived from any source outside of India
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Individuals with financial assets located outside of India
If an individual has earned income from the below sources:
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Capital gains
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Income from more than one house property
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Income from owning or maintaining racehorses
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Income taxable under special cases like Sections 115BBDA or 115BBE
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Income from lottery winnings
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Agricultural income of more than ₹5,000
If an individual has claimed any loss, deduction, relief, or tax credit under the following categories:
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Relief claimed under Sections 90, 90A, or 91 of the Income Tax Act
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Deduction claim under Section 57
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Loss carried forward under any income head
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Deduction claim of tax deducted at source (TDS) in the hands of another person
Loss under income from other sources
ITR-4 Structure
The ITR-4 form is structured into various parts, as explained below.
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Part A - General Information: This section gathers essential personal details such as name, date of birth (DOB), address, and contact information.
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Part B - Income Details:
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Salary income
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Income from house property
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Income from other sources
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Part C - Deductions and Total Taxable Income
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Part D - Tax Status and Computation
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Schedule BP - Income from Business or Profession
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Schedule IT - Tax Payments
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Schedule TCS - Tax Collected at Source
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Schedule TDS-1 and TDS-2 - Tax Deducted at Source (TDS)
Major changes in the ITR-4 form for AY 2024-25
The ITR-4 form for the assessment year 2024-25 has undergone significant changes, as explained below.
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The new tax regime has become the default tax regime for individuals, Hindu Undivided Families (HUFs), AOPs, BOIs, and AJPs as per the amendments introduced by the Finance Act 2023. Those preferring the old regime must submit Form 10-IEA to opt out of the new tax regime.
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The updated ITR-4 form now includes a dedicated column for disclosing the amount eligible for deduction under Section 80CCH.
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The turnover threshold limit for opting for presumptive taxation has increased. Now, businesses with a turnover of up to ₹3 crores (up from ₹2 crores) and professionals with gross receipts of up to ₹75 lakhs (up from ₹50 lakhs) can benefit from this scheme, provided that their cash transactions don't exceed 5% of their total turnover or receipts from the previous year.
To accommodate these changes, the ITR-4 form has been updated with a new section called "receipts in cash" under Schedule BP.
How can KarrTax help with ITR-4 return filing?
Here’s how KarrTax can help you!
To start the filing process, click here, and the below screen will appear, where you have to choose the income source accordingly.
Then, click on Next to let us know your total income.
Finally, the last step is to provide us with your email ID and mobile number so we can connect you with one of your tax experts. (It’s that simple!)
With our expertise help, filing your ITR-4 return becomes easier, ensuring that you meet all tax requirements correctly and timely.
Is your Aadhar and PAN card linked? Check here.
If not, link it right away. Without this, you won’t be able to file ITR, resulting in potential penalties. If you need KarrTax help, click here.
Frequently Asked Questions (FAQs)
1.What is Presumptive Income?
Presumptive income is a simplified method of calculating taxable income for certain taxpayers, primarily small businesses and professionals.
2.Along with presumptive income, I also have capital gains income, So can I file ITR-4?
No, in such a scenario, you can not file ITR-4 because capital gain income can’t be shown in the form.
3.What documents are required for ITR-4 return filing?
Here's a list of documents typically required for ITR-4 filing:
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Form 26AS & AIS
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Bank statements
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Form 16 and 16A
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Housing loan interest certificates
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Details of business expenses such as rent, salaries, utilities, etc.
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Rental agreement
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Investment receipts, such as LIC, ULIP, etc.
4.I am providing professional services. Can I avail presumptive scheme?
Absolutely, yes! If you are income is not more than ₹50 lakhs, then you can file ITR-4.
5.How ITR-1 and ITR-4 are different?
The ITR-1 form is filed by salaried individuals with simple income structures, while the ITR-4 is filed by individuals, HUFs, and firms (other than Limited Liability Partnerships).
6.I am a salaried individual and also earn money from trading; which ITR form should I file?
To know which ITR to file according to your income source, click here.
7.Can I opt for the presumptive taxation scheme under Section 44AD if my business's gross receipts exceed ₹2 Crore in the financial year?
No, you cannot opt for the presumptive taxation scheme under Section 44AD if the total turnover or gross receipts from your business exceed the prescribed limit of ₹2 Crore.However from A.Yr. 2024-25, business with turnover up to 3 Crores can opt for 44AD subject to the condition that cash transactions does not exceed 5% of total turnover/receipts.
Herein, We list some of the features/highlights of Presumptive Taxation Scheme
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There is no requirement of maintaining books of accounts
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The net income is estimated to be 8% of receipts if the same is in cash. However, for receipts in Digital mode, the net income is assumed to be 6% of such gross receipts.
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No other business expenses is allowed
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The whole of the advance tax has to be paid by 15th March. i.e. the quarterly installments of Advance Tax need not to be paid.
Presumptive Taxation Scheme for Businesses u/s 44AD
Businesses having a turnover of upto Rs.2 crores can avail the benefits of presumptive taxation scheme. The rates of presumed income chargeable to tax under the scheme is set at 8% (if the receipts are in cash and 6% if the same are in Digital mode). i.e. If a person has a cash turnover of Rs.1 Cr. During a particular Financial year, the income tax is payable on Rs.8 lacs as income. However, if the actual income is more than 8% or 6% as the case may be, then the higher income (i.e. actual) has to be declared. There is no requirement to maintain books of accounts if a person opts for this scheme.From A.Yr. 2024-25, the turnover limit for availing benefits u/s 44AD has been increased to 3 Cr subject to the condition that cash transactions should not exceed 5% of total turnover/receipts.
Presumptive Taxation Scheme for Professionals u/s 44ADA
The presumptive taxation scheme has also been extended to professionals. However, professionals under this scheme should have gross receipts from professional services not exceeding Rs.50 lakhs in a financial year. From A.Yr. 2024-25, this limit of 50 lakhs has been increased to Rs.75 lakhs subject to the condition that total cash transactions should not exceed 5% of total receipts. For professionals enrolled under the presumptive taxation scheme, 50% of the total receipts of the professional during the financial year would be considered as profit and get taxed under the income tax head, “Profits and gains of business or profession”. For example, if a professional has total receipts from profession amounting to Rs.40 lakhs, then the taxable income would be a minimum of Rs.20 lakh under the presumptive taxation scheme.
Similar to the presumptive taxation scheme for Business, professionals can also declare income more than the mandatory 50% of the total receipts. However no deduction of Salary & interest paid to Partners are allowed under this scheme. Also no other deduction is allowed from the declared income.
Presumptive Taxation Scheme for Transporters u/s 44AE.
The presumptive taxation scheme for transporters can be availed by persons involved in plying, hiring or leasing of goods carriages and who own less than 10 goods carriage.
In this scheme, for heavy goods carriage/vehicle, the profit shall be equal to Rs.1000 per ton of gross vehicle weight or unladen weight for every month or part of month during which the heavy goods vehicle is owned by the assessee for the previous year or the amount claimed to have been actually earned from such vehicle whichever is higher.
Whereas in the case of light goods vehicle, the profit shall be equal to Rs. 7500 per month or part of the month for which the vehicle is owned by the assessee or the amount claimed to have been actually earned from such vehicle whichever is higher.