The ITR 4 Form is for the taxpayers who have opted for the presumptive income scheme as per Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act. This form is also called Sugam form and is mandatory to be filled by taxpayers eligible for it.
However, for businesses exceeding turnover of Rs.2 Crores there is ITR-3. Also, ITR-5 may be required as applicable. Here, let’s find out the applicability of ITR 4:
Structure of ITR 4 Form (For AY 2018-19):
|Part A:||Part B:||Part C:||Part D:|
|General Information||Gross total income from the five heads of income||Deduction and total taxable income||Tax computation and tax status|
Schedule BP: Provide details of income from Business (*the form has been modified to include GST details)
Schedule IT: Flourish statement of payment of advance-tax
Schedule-TCS: Provide statement of tax collected at source (TCS).
Schedule TDS1: Provide statement of tax deducted at source (TDS) on salary.
Schedule TDS2: Provide statement of tax deducted at source (TDS) on income except salary.
Schedule DI: Provide statement of investments in the extended period.
Eligibility to File ITR-4:
ITR-4 is to be filed by individuals, HUFs and Partnership Firms who meet the following conditions –
1) Business income computed in accordance with special provisions under Sections 44AD and 44AE.
2) Income from Professional sources computed under Sections 44ADA
3) Income from one house property up to Rs 50 Lakh (excluding brought forward loss or loss to be carried forward under this head)
4) Income from salary/ pension up to Rs 50 Lakh
5) Income up to Rs 50 Lakh from other sources (excluding winning from lottery and income from race horses)
Note: Freelancers can also opt for this scheme if their gross receipts don’t exceed Rs 50 Lakh.
Presumptive Taxation Scheme of Sections 44AD, 44AE and 44ADA:
1) Section 44AD is available to individuals, HUFs or partnership firms. It is not available to a company.
2) Section 44AE is allowed to all taxpayers - individuals, HUFs, companies and partnership firms.
3) Section 44ADA is applicable only to a resident assessee, who is an individual, HUF or partnership firm and not LLP (Limited Liability Partnership Firm).
Eligible professionals under Section 44ADA:
Interior decorations, Technical consulting, Engineering Accounting, Legal, Medical, Architecture and other professionals, as mentioned below:
a. Movie artists includes an actor, producer, editor, director, art director, music director, dance director, singer, lyricist, story writer, screenplay or dialogue writer, cameraman, and costume designers
b. Authorized representatives or persons who represent another person for a fee before a tribunal or any authority constituted under any law.
c. Other notified professionals
How to file ITR-4 Form?
You can submit your ITR-4 Form in the following two ways:
1) Offline: One can file ITR offline by furnishing a physical paper form/ a bar-coded return, in return of an acknowledgement issued by the Income Tax Department. Filing income tax return offline is allowed in the following conditions:
2) Online: One can file ITR online by filling up a digital form under a digital signature and then submitting the verification of the return in Return Form ITR-V. Once submitted, an acknowledgement is sent to your registered e-mail ID. Another way to submit the form is by downloading it manually from official Income Tax website. Then send the duly filled and signed form to the Income Tax Department’s CPC office in Bangalore within 120 days of e-filing.
Major Changes made in ITR-4 for AY 2020-21:
1) Individual taxpayers who meet the following conditions must also file ITR 1:
2) The returns filed under this section has been segregated into normal filing and filed in response to notices.
3) The ‘Schedule VI-A’ for tax deductions is amended to include deduction under section 80EEA and section 80EEB.
4) In ‘Schedule BP’, gross receipts or turnover to include revenues from prescribed electronic modes received before the specified date.
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ITR 4 (Also called Form Sugam):
This form applies to all resident individual / HUF / Firms (other than LLP) having total income up to Rs 50 lacs & having income under the following heads:
a) Income from business or profession computed on presumptive basis under section 44AD or 44AE or 44ADA
b) Income from Salary/Pension
c) Income from One House Property
d) Income from Other Sources
Persons not eligible to use this form:
a) Person having Income from Capital Gains
b) Profits and gains from business or professions which is not required to be computed u/s 44AD, 44AE or 44ADA
c) Income from more than one house property
d) Income from a lottery, activity from owning & maintaining horses, income chargeable under special rates 115BBDA or 115BBE
e) Agricultural income over Rs. 5000
f) Persons having any claim of loss under the head house property and Other Sources
g) Persons claiming relief u/s 90 and/or 91
h) Director of a company having unlisted shares, signing authority in any account outside India, and such other conditions.
In case, a person keeps and maintains all books of accounts as per section 44AA, and also gets his accounts audited and obtains an audit report as per section 44AB, filling up the Form ITR-4 (Sugam) is not mandatory. In such a case, other regular return forms viz. ITR-3 or ITR-5, as applicable, should be used and not this Form.