Who can File ITR 4?

Wondering about ITR4 for whom? In India, ITR 4, also known as Sugam, is a form primarily designed for individuals and Hindu Undivided Families (HUFs) who have income from a presumptive business or profession.

Who Should File ITR 4?

It is applicable for taxpayers who meet certain criteria and want to opt for presumptive taxation under sections 44AD, 44ADA, or 44AE of the Income Tax Act. Here’s a detailed explanation of ITR 4 who can file:

Business Income under Presumptive Taxation

• Section 44AD: Individuals, HUFs, or partnership firms (other than LLPs) whose turnover or gross receipts do not exceed Rs. 2 crore in a financial year can opt for presumptive taxation. They are deemed to have earned 8% or more of their turnover as their income and are not required to maintain detailed books of accounts.

• Section 44ADA: Professionals like doctors, engineers, architects, interior decorators, etc., whose gross receipts do not exceed Rs. 50 lakh in a financial year can opt for presumptive taxation. They are deemed to have earned 50% or more of their gross receipts as their income.

• Section 44AE: Individuals, HUFs, or partnership firms engaged in the business of plying, hiring, or leasing goods carriages and who do not own more than 10 goods carriages at any time during the financial year.

• Other Sources of Income: Apart from income from business under presumptive taxation, ITR 4 can also be used to report income from other sources such as salary, house property, and income from other sources, provided they do not exceed the specified limits.

Not Eligible for ITR 4:

• Taxpayers with income from more than one house property.

• Individuals having income from capital gains.

• Individuals having income from lottery, racehorses, legal gambling, etc.

• Individuals claiming foreign income under double taxation relief.

Taxpayers eligible to file ITR 4 can do so by filling out the form online or offline, depending on their preference and convenience. They need to provide details of income under presumptive taxation, deductions claimed, and other relevant information accurately.

ITR 4 is designed for individuals and HUFs opting for presumptive taxation under sections 44AD, 44ADA, or 44AE. 

It simplifies the tax filing process for small businesses and professionals by allowing them to declare income based on a presumed percentage of turnover or receipts, thereby reducing the compliance burden associated with maintaining detailed accounts. 

Taxpayers should ensure they meet the eligibility criteria and accurately report all income and deductions to comply with tax regulations effectively. This is all about ITR 4 for whom.

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I am a CA, so I know

ITR 4 who can file. I can explain it to you.

• Small business owners that just keep an approximate volume of their sales ledger rather than books of accounts must file the current ITR-4. This includes manufacturers, wholesalers, traders, and online sellers.

• The ITR-4 form must then be filed by independent contractors or freelancers, including bloggers, vloggers, and web content writers. 

• Professionals whose income is calculated on an assumption basis under sections 44AD, 44ADA, or 44AE, such as chartered accountants, physicians, solicitors, and engineers, among others, must also file this form.

• People must file an ITR-4 Form if they are receiving a wage in addition to additional revenue from part-time employment or freelancing. 

• Moreover, those who profit from commodities, forex, cryptocurrencies, futures and options (F&O), or other financial instruments must file this specific form.

W

ho Will File ITR 4

For AY 2023-24?

If a resident individual, HUF, or firm (other than an LLP) earns the following income during the FY, they can file an ITR-4: 

1. Income not exceeding ₹50 Lakh

2. Business and professional income, which is estimated in accordance with Sections 44AD, 44ADA, or 44AE

3. Income from one house property, one pension or salary, and agriculture (up to ₹ 5,000/-)

4. Additional sources, which consist of:

• Interest from a Savings Account 

• Interest from a Deposit (Cooperative Society, Bank, Post Office)

• Interest on Refund of Income Tax

• Family Pension

• Interest accrued on increased pay

• Any additional interest income, such as that on an unsecured loan

Now you know

ITR 4 who can file.

I can understand that filing ITR can be quite confusing at times. I have a CA friend who has been helping me file ITR for two years so now I know who can file ITR 4.  Let me tell you that ITR 4 is an income tax return form for those taxpayers, who have chosen the presumptive income scheme under Section 44AE, Section 44ADA, and Section 44AD and whose income doesn’t exceed Rs. 50 lacs.

• ITR 4 is to be filed by a resident individual/HUF/firm (other than LLP) who has:

• Income not more than Rs. 50 lacs during the financial year

• Income from profession and business that is computed on a presumptive basis under sections 44AE, 44ADA, or 44AD.

• Income from pension/salary, one house property (OHP), agricultural income (up to Rs. 5000)

• Other sources include (excluding income from horse races and winning from lottery and):

• Interest received on enhanced compensation

• Family Pension

• Interest from Income Tax Refund

• Interest from Deposit (Cooperative Society/Post Office/Bank)

• Interest from Savings Account

• Any other Interest Income

Now you know who file ITR 4.

ITR 4 is not to be filed by a HUF/ individual/firm (other than LLP) who:

• is an RNOR (Residents Not Ordinarily Resident), and NRI

• has a total income of more than Rs. 50 Lacs

• has agricultural income above Rs. 5,000/-

• is a Director in an organization

• has income from more than OHP;

• has income from:

• the activity related to the maintenance and ownership of horse races;

• winnings from lottery;

• income taxable at special rates under Section 115BBE or section 115BBDA

• has deferred income tax on Employee Stock Ownership Plan received from employer being an eligible start-up

• has held any unlisted equity shares during the previous year

• isn’t covered under the eligibility conditions for ITR 4

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I hope now you know who can file ITR 4.