Income Tax Return Filing ITR-4

ITR-4 (Sugam) is for individuals, HUFs, and partnerships opting for presumptive taxation. It calculates income as a percentage of total business earnings or fixed sum per commercial car. Not for LLPs; residents only.

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Who is not required to submit this Form?

ITR-4 is not applicable for individuals and Hindu Undivided Families (HUFs) falling under the following categories:

1. Total Income Exceeds Rs. 50 Lakh:
If the total income earned by the individual or HUF during the fiscal year exceeds Rs. 50 lakh, they are not eligible to use ITR-4.

2. Carried Forward Losses:
If the individual or HUF has any losses from previous years that have been carried forward and need to be adjusted against the current year's income, they cannot use ITR-4.

3. Signing Authority Outside India:
Individuals or HUFs who are authorized to sign documents at a location outside of India are not eligible to use ITR-4.

4. Investments in Unlisted Equity Shares:
If the individual or HUF has made investments in unlisted equity shares at any point during the fiscal year, they are not eligible to use ITR-4.

5. Overseas Assets or International Income:
Individuals or HUFs who possess overseas assets or have earned income from international sources are not eligible to use ITR-4.

6. Multiple Residential Properties Contributing to Income:
If the income of the individual or HUF is derived from more than one residential property, they cannot use ITR-4.

7. Directorship in a Corporation:
Individuals who hold a directorship position in a corporation are not eligible to use ITR-4.

8. RNOR or Non-Resident Status:
Individuals who qualify as Residents Not Ordinarily Resident (RNOR) or non-resident as per tax residency rules are not eligible to use ITR-4.

For individuals or HUFs falling under these categories, they should consider using the appropriate ITR form based on their specific circumstances to ensure compliance with tax regulations. It's recommended to consult with a tax professional or legal advisor for accurate and up-to-date guidance tailored to individual situations.

Who must submit an ITR 4?

Individuals, Hindu Undivided Families (HUFs), and partnership firms meeting the following criteria for the Assessment Year 2020–21 are required to file Form ITR-4:

1. Section 44AD or 44AE Business Income
2. Earnings from a Profession as per Section 44ADA
3. Salary or Pension Income up to Rs 50 lakh
4. Income from a Single Residential Property up to Rs. 50 lakh (excluding cases of brought forward losses or loss to be carried forward)
5. Income from Other Sources up to Rs 50 lakh (excluding winnings from lottery and income from horse races)

Form ITR-4 is structured into the following sections:

Part A - General:
- Name and Initials
- PAN Number
- Office Address
- Additional Personal Details
- Document Status
- Accounting Information
- Business Nature

Part A-BS - Balance Sheet as of March 31, 2017:
- Income Sources
- Funds Utilization
- Details in the absence of Regular Books of Accounts (borrowers, creditors, stock, cash)

Profit and Loss Account, Part A:
- Credits to Profit and Loss Account
- Debits to Profit and Loss Account
- Tax and Appropriations Provision
- Details without Regular Books of Accounts (gross revenue, gross profit, net income)

Other Information, Part A-OI:
- Accounting Method Used in the Previous Year (Cash or Mercantile)
- Change in Accounting Method (Yes/No)
- Effect on Profit due to Departure from Section 145A's Accounting Requirements
- Closing Stock Value Method Used in the Previous Year
- Various Amounts affecting Profit and Loss Account
- Credit Balance for Various Taxes
- Amounts under Sections 33AB, 33ABA, 40, 40A, 43B, 41

Quantitative Information, Part A-QD:
- Trade Issue Information (stock opening, acquisition, sales, final stock, etc.)

Part B: Income Computation and Tax Calculation:
This part includes 35 Schedules detailing various aspects of income, deductions, tax computation, and relief claims.

Filing Options:
You can file Form ITR-4 offline or online.

Offline:
- Individuals aged 80 years or older
- Individuals with income less than Rs 5 lakhs and exempt from claiming a refund can file offline.
- Submission options: physical paper return or bar-coded return.

Online/Electronically:
- Submission with a digital signature
- Acknowledgement sent to the registered email address or downloadable from the income tax website.
- Sign and send ITR-V to the CPC office in Bangalore within 120 days of e-filing.

Changes in ITR-4 for AY 2021–22:
- Declaration for choosing old or new tax regimes added in Part A.
- Part B includes a dropdown list for "Income from other sources" specifying income types, including dividends categorized quarterly for section 234C relief.
- No extended Schedule DI as introduced in AY 2020–21.

Remember that ITR-4 is an annexure-less form, meaning no attachments are required.

FAQ

Frequently Asked Questions

Yes, but only if the following conditions are met: a) The taxpayer is 80 years of age or older; b) the taxpayer has an annual income of less than Rs 5 lakh and is not required to make an income tax refund claim.

The ITR-4 filing deadline is July 31, 2021, for AY 2021–22 (FY 2020–21).

Any additional unrealised rent recoveries will be counted as part of your income under the heading Income from House Property in the year that the rent is realised (whether or not you are the property owner in that year). It will be taxed after deducting a sum equivalent to 30% of the unrealised rent.

No, a person cannot claim depreciation or any other expense if they are paying tax at the rate of 8% following Section 44AD.

You are not required to keep the books of accounts relating to the designated profession if you choose to use the presumptive taxation scheme of Section 44ADA (declare income at 50% of the gross receipts) and are engaged in the defined profession as described in Section 44AA (1). (i.e., the provision of Sections 44AA will not apply).