How to File ITR-4?

The ITR-4 Form, also known as Sugam, is specifically designed for individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) who have opted for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE of the Income Tax Act. It is ideal for small businesses and professionals with turnover or income within prescribed limits. However, it is not applicable to those with income exceeding ₹50 lakh, foreign assets, or income from speculative businesses. To file ITR-4, you need essential documents such as PAN, Aadhaar, bank details, and financial statements. The form’s structure comprises sections for personal details, income computation, tax details, and declarations, making it user-friendly. Filing ITR-4 online on the Income Tax Portal is straightforward, involving login, form selection, and submission after thorough verification. This guide will walk you through eligibility, restrictions, required documents, form structure, and the step-by-step online filing process for ITR-4.

What is ITR-4?

ITR-4, also known as Sugam, is an income tax return form designed for taxpayers who have opted for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE of the Income Tax Act. This simplified form is primarily meant for small businesses and professionals, allowing them to report their income on a presumptive basis instead of maintaining detailed books of accounts. It covers income from business, profession, salary/pension, one house property, and other sources (excluding lottery or horse race winnings). With its streamlined structure, ITR-4 makes tax filing easier for taxpayers with straightforward income sources.

Who is Eligible to File ITR-4?

The following individuals and entities are eligible to file ITR-4:

  1. Individuals: Sole proprietors engaged in small businesses or professions.
  2. Hindu Undivided Families (HUFs): HUFs earning income under the presumptive taxation scheme.
  3. Partnership Firms: Firms (other than LLPs) opting for presumptive taxation.
  4. Income Sources: Taxpayers with income from:
    • Business under Section 44AD (presumptive taxation for businesses).
    • Profession under Section 44ADA (presumptive taxation for professionals).
    • Goods transport under Section 44AE (presumptive taxation for transporters).
    • Salary/pension, one house property, or other sources (excluding winnings from lotteries and horse races).
  5. Income Limit: Total income must not exceed ₹50 lakh in a financial year.

Who Cannot File ITR-4?

The following individuals and entities are ineligible to file ITR-4:

  1. High-Income Taxpayers: Individuals or entities with total income exceeding ₹50 lakh.
  2. Speculative Income: Taxpayers with income from speculative businesses like trading in stocks or derivatives.
  3. Non-Eligible Businesses/Professions: Businesses or professionals not covered under the presumptive taxation scheme.
  4. Foreign Income or Assets: Individuals with foreign income, foreign bank accounts, or assets outside India.
  5. Capital Gains: Taxpayers earning income from capital gains (short-term or long-term).
  6. More Than One House Property: Individuals earning income from more than one house property.
  7. LLP: LLPs are not eligible to file ITR-4.
  8. Other Incomes: Income from winnings in lotteries, horse races, or unexplained income is not eligible under ITR-4.

What are the Documents Needed to File ITR-4?

Here’s a comprehensive list of the essential documents needed:

  1. Personal Information Documents:

    • PAN Card
    • Aadhaar Card
    • Bank Account Details
  2. Income Proof:

  3. Tax Deduction Details:

    • Form 26AS: Annual tax statement showing taxes paid and TDS details.
    • AIS (Annual Information Statement): To verify additional income or financial transactions.
  4. Proof of Investments and Expenses:

    • Investment Proofs: Documents for deductions under Section 80C (e.g., LIC, PPF, NSC, ELSS).
    • Health Insurance Premiums: For claiming deductions under Section 80D.
    • Education Loan: Interest certificate for deductions under Section 80E.
  5. Other Supporting Documents:

    • Advance Tax/Challan Receipts: If advance tax has been paid.
    • Loan Repayment Documents: Interest certificates for deductions.

What is the Structure of the ITR-4 Form?

The ITR-4 Form is structured to simplify tax filing, with specific sections to capture all relevant income and tax details. Here is an overview of its structure:

  1. Part A: General Information

    • Personal details such as name, PAN, Aadhaar, address, and contact information.
    • Filing status: Whether the return is filed voluntarily, under Section 139(1), or in response to a notice.
  2. Part B: Gross Total Income

    • Income details from various sources:
      • Business Income: Under the presumptive taxation scheme (Sections 44AD, 44ADA, or 44AE).
      • Salary/Pension: Income from employment.
      • House Property: Income or loss from one house property.
      • Other Sources: Bank interest, dividends, etc.
  3. Part C: Deductions and Taxable Income

    • Deduction details under Chapter VI-A, including Sections 80C, 80D, 80E, etc.
    • Computation of total taxable income after deductions.
  4. Part D: Tax Details

  5. Schedule BP: Details of Business or Profession

    • Gross turnover, presumptive income, and expenses related to business or profession under presumptive taxation.
  6. Tax Payment Details

  7. Verification

    • Declaration by the taxpayer, verifying the accuracy of the information provided.
  8. Bank Account Details

    • Disclosure of all active bank accounts, including the account where refunds (if any) should be credited.

How to File ITR-4 Online on the Income Tax Portal?

Filing ITR-4 online on the Income Tax Portal is a straightforward process that can be completed in a few simple steps. Here’s a detailed guide to help you:

Step 1: Log in to the Income Tax Portal

  1. Visit the official Income Tax e-Filing portal
  2. Log in using your PAN as the User ID and your password.

Step 2: Go to the ITR Filing Section

  1. Once logged in, click on the “e-File” menu.
  2. Select “Income Tax Return” from the dropdown options.

Step 3: Select the Assessment Year and ITR Form

  1. Choose the relevant Assessment Year for which you want to file the return.
  2. Select ITR-4 (Sugam) from the list of available forms.
  3. Choose the filing type as “Online” and click “Proceed”.

Step 4: Fill in the ITR-4 Form

The ITR-4 form is divided into several sections. Fill in the required details as follows:

  1. General Information: Verify your personal details like name, PAN, Aadhaar, and contact details (auto-populated).
  2. Income Details:
  3. Tax Paid Details: Include details of advance tax, self-assessment tax, and TDS (as reflected in Form 26AS or AIS).
  4. Deductions: Enter eligible deductions under Chapter VI-A, such as Sections 80C, 80D, 80E, etc.
  5. Bank Details: Provide details of all active bank accounts, including the account for refund purposes.

Step 5: Validate and Preview the Form

  1. After filling in all sections, click on the “Validate” button to ensure there are no errors or missing information.
  2. Preview the form to verify all entered details are accurate.

Step 6: e-Verify the Return

  1. Choose an e-verification method:
    • Aadhaar OTP: A one-time password sent to the Aadhaar-linked mobile number.
    • Net Banking: Log in through your bank’s net banking portal for verification.
    • Electronic Verification Code (EVC): Generated through your bank account or pre-validated bank/Demat account.
    • Digital Signature Certificate (DSC): Required for certain taxpayers, such as companies or tax audits.
  2. Complete the verification process.

Step 7: Submit the ITR-4 Form

  1. After verification, click “Submit” to file the return successfully.
  2. A confirmation message will appear on the screen, and an Acknowledgment Number will be generated.

Step 8: Download the ITR-V Acknowledgment

If you did not e-verify during submission, download the ITR-V acknowledgment, sign it, and send it to the Centralized Processing Centre (CPC), Bengaluru via post within 30 days.

By following these steps, you can easily file your ITR-4 online without errors. Always cross-check your details with Form 26AS, AIS, and supporting documents to ensure accuracy and avoid notices from the tax department.

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