ITR-4, also known as Sugam, is an Income Tax Return (ITR) form used by individuals, Hindu Undivided Families (HUFs), and firms (excluding LLPs) who have opted for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE of the Income Tax Act. This form is designed for small businesses and professionals who want to file their tax returns under a simplified taxation scheme without maintaining detailed books of accounts.
ITR-4 can be filed by individuals, HUFs, and firms (except LLPs) who meet the following conditions:
• Total income does not exceed Rs. 50 lakh in a financial year.
• Income includes business income under Section 44AD or 44AE.
• Income includes professional income under Section 44ADA.
• Income includes salary, pension, one house property, and other sources such as interest income.
• Agricultural income is up to Rs. 5,000.
• The taxpayer is a resident of India.
Individuals, HUFs, and firms cannot file ITR-4 if:
• Their total income exceeds Rs. 50 lakh.
• They have income from more than one house property.
• They have income from capital gains.
• They have income from business or profession but have not opted for the presumptive taxation scheme.
• They are a director in a company.
• They have invested in unlisted equity shares during the financial year.
• They own foreign assets or have foreign income.
• They are a Non-Resident Indian (NRI) or Resident but Not Ordinarily Resident (RNOR).
Before filing ITR-4, the following documents should be kept ready:
• PAN card
• Aadhaar card
• Bank account details
• Form 16 (if applicable)
• Salary slips (if applicable)
• Profit and Loss (P&L) statement for business or profession (if available)
• TDS certificates from employers, clients, or other entities
• Interest certificates from banks and financial institutions
• Investment details for tax-saving deductions (PPF, LIC, NSC, etc.)
• Rental income details (if applicable)
• Advance tax and self-assessment tax payment details
• Section 44AD: Applicable for small businesses with turnover up to Rs. 2 crore. Taxable income is considered as 8% of turnover (6% for digital transactions).
• Section 44ADA: Applicable for professionals such as doctors, lawyers, architects, etc., with gross receipts up to Rs. 50 lakh. Taxable income is considered as 50% of gross receipts.
• Section 44AE: Applicable for taxpayers engaged in the business of plying, hiring, or leasing goods carriages. Taxable income is determined based on the number of vehicles owned.
ITR-4 can be filed online through the Income Tax e-Filing portal. The steps involved are:
1. Visit the Income Tax e-Filing portal.
2. Log in using PAN, password, and captcha.
3. Click on ‘File Income Tax Return’.
4. Select the assessment year and mode of filing.
5. Choose ‘ITR-4’ from the list of available forms.
6. Fill in all the required details related to business income, salary, house property, and deductions.
7. Verify the tax payable or refundable amount.
8. Submit the form and verify using Aadhaar OTP, net banking, or physical verification method.
9. Download the acknowledgment for future reference.
The due date for filing ITR-4 depends on whether audit is required:
• For individuals and businesses not requiring an audit – July 31st of the assessment year.
• For individuals and businesses requiring an audit – October 31st of the assessment year.
Failing to file ITR-4 within the due date may result in penalties:
• A late fee of Rs. 5,000 if filed after the due date but before December 31st.
• A late fee of Rs. 10,000 if filed after December 31st.
• No penalty if total income is below Rs. 5 lakh, but a late fee of Rs. 1,000 applies.
• Additional interest may be charged on unpaid taxes.
• Compliance with tax laws.
• Faster processing of tax refunds.
• Proof of income for loan and credit applications.
• Avoidance of penalties and legal issues.
• Helps in financial planning and investment tracking.
Vakil360 provides expert assistance in filing ITR-4 accurately and efficiently. Our services include:
• Step-by-step guidance for hassle-free filing.
• Expert review to ensure compliance with tax laws.
• Quick and error-free submission.
• Maximum tax savings by applying eligible deductions.
• Timely filing to avoid penalties.
With Vakil360, taxpayers can ensure their ITR-4 filing is done correctly and on time, ensuring compliance with tax regulations. Contact us today for professional tax filing services.
