ITR-4: How to file form ITR-4 on Income Tax Portal?

Last Updated at: December 04, 2019
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How to file form ITR-4 on Income Tax Portal?

The ITR-4 form also known as SUGAM form, is to be filed by the taxpayers who have opted for the presumptive income scheme under Section 44AD, Section 44ADA, and Section 44AE, under the Income Tax act. It includes individuals and Hindu Undivided Families running a business with turnover below 2 crores and gross income more than 50 lacs.

In case, the turnover exceeds 2 crores, the taxpayers need to file the ITR 3 form.

Who can File ITR-4?

The individuals, Hindu Undivided Families and partnership firms who are eligible for filing ITR-4 must have their income from the following:

  •   Income from the business under Section 44AD or Section 44AE.
  •   Income up to 50 lacs from salary/pension.
  •   Income from the profession included under Section 44ADA.
  •   Income up to 50 lacs from one house property.
  •   Income up to 50 lacs from other sources (This excludes income from lotteries).
  •   Freelancers can also file this form, the condition being that their gross income does not exceed 50 lacs.

Who does not need to File ITR-4?

  • Individual who is the director of any company and has also invested in various unlisted equity shares.
  • Individual whose income is above 50 lacs and gets his income from Salary, property and other sources.
  • Persons looking to claim relief under Sections 90 or 91
  • Individuals having assets in other countries or with a source of income from abroad
  • Persons who claim deductions under Sections 10AA
  • Individuals having unlisted equity shares at any time during the previous year

Structure of ITR-4

The ITR-4 is basically divided into four parts and six schedules which are as follows:

  • Part A: It contains General Information about the individual such as name, address, PAN, Aadhaar details, nature of employment, and other important details.
  • Part B: Gross Total Income from the respective sources whether it is salary, pension, house, and other such sources.
  • Part C: Total income that is taxable and the deductions. The total deductions from the income cannot be more than the total earnings/salary. Deductions under Sections 80D, 80CCG, 80CCC, etc. 
  • Part D: Tax status and the computation of taxes.
  • Schedule BP: Contains the details about the income that comes from the business.
  • Schedule 80G: Contains the details about the donations that are entitled under 80G for donation.
  • Schedule IT: Statement regarding the advance tax and self-assessment payments.
  • Schedule-TCS: Statement regarding the Tax Collected at Source.
  • Schedule TDS1: Statement regarding the tax that is deducted at source on the salary.
  • Schedule TDS2: Statement regarding the tax that is deducted on other incomes apart from the salary of the individual.
  • Verification: The verification is done by filling in the details including your name, father’s name, PAN card details, address, the place, and date. The Verification can be completed digitally by using the Digital Signature or the EVC code. 

Filing the ITR-4 form

The ITR form can be submitted both online and offline.

Offline

The ITR form can be filed offline in the following cases:

  • The individual is above 80 years of age.
  •   The income is less than 5 lacs and the individual needs to file in the request for income return.

The ITR form can be filed offline either by filling in the form physically or by furnishing through a bar-code. 

Online

The first step of filing the ITR-4 form online is to download it from the official website of the Income Tax Department.

The ITR form can be filed online by:

Furnishing the form online along with a Digital Signature, or by transmitting the data through electronic means, and then submitting the verification form of ITR-V and the third option is verification through a 10-digit code.

In both cases, the acknowledgement is either given on paper or sent to your registered email id.

The ITR-4 does not require submission of any documents along with it. 

Changes made in ITR-4 for the Annual Year 2019-20

  • ITR-4 is not applicable to the individuals who are the directors of a company or have invested in any of the shares.
  • Under the ‘Nature of Employment’ section, Part A, the ‘Pensioners’ section has been introduced.
  • Deduction of the salary will further be divided into various sections, namely, standard deduction, professional taxes, and entertainment allowances.
  • 80G Deduction: The donations so made are further divided into sections.
  • For the various sections namely, Section 44AD, Section 44ADA, Section 44AE, the business details have to be submitted separately.
  • Under Section 44AE, various new fields have been added.
  • The turnover text of GST details has also been replaced by, ‘Annual Value of Outward supplies as per the GST returns filed.’
  • The column for senior citizens has been included in Section 80TTB.

Dates for filing the ITR-4 Form

Businesses that have chosen the income tax scheme under Section 44AE, Section 44AD and Section 44ADA, have to file in their returns before 30th September.

The Freelancers and other professionals that have been recently added need to file in their returns before 31st July.

Presumptive taxation scheme

Presumptive taxation scheme also called as PTS, allows small businesses to calculate taxes based on an estimated income. Entities adopting this scheme can get freed from the tedious tasks of maintaining books of accounts. They can declare their income at a prescribed rate.

Small taxpayers can avail the presumptive taxation schemes under four sections:

Section 44AD

All individuals, HUF and partnership firms. Companies cannot make use of this section.

Eligibility criteria: 

  • Your gross receipts or the turnover of your business must be less than Rs 2 crore
  • You must be a resident of India
  • If you have claimed deductions under Sections 10, 10A, 10B or Sections 80HH-80RRB in the relevant year.

Section 44AE

  • All taxpayers – individuals, HUFs, companies and partnership firms are allowed to adopt this scheme.

Eligibility criteria

  • You should be in the business of plying, leasing or hiring trucks 
  • You should not own more than 10 goods carriages at any time during the year. This also includes carriages taken on hire purchase or on instalment.

Section 44ADA

  • Only resident assessee or individuals, HUFs, Partnerships, except LLPs can adopt this scheme.

Eligibility criteria

  • Business involved in leasing or hiring goods and carriages
  • Agencies
  • Income from brokerage or commission
  • Professionals in the field of law, medicine, technical consultancy, interior decoration, information technology, and architecture are usually eligible for this scheme. 

Conclusion

As such, the ITR-4 form is for all those who run a small business and do not have sufficient and enough resources to calculate their profit and loss.

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