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ITR 4 Form (SUGAM) - What is ITR 4, Eligibility & Who Can File ITR 4?

Updated on: 23 May, 2024 03:01 PM

ITR-4, is filed by professionals & businessmen who are filing their taxes in accordance with the presumptive scheme of taxation as per Section 44AD, Section 44ADA, and Section 44AE. Every year new ITR 4 forms are notified by the Income Tax Department with some changes. There are 7 types of ITR forms in total, which are to be filed in different scenarios. In this article, we will talk about the ITR 4 form, what is ITR 4, ITR 4 last date, and how to fill ITR 4 with examples.

Tax2win can help you select the right form while filing ITR for you. File ITR today.

What is ITR 4 (SUGAM) in the Income Tax Act?

The Income Tax Department has notified different ITR forms on the basis of the nature of income & class of people, like ITR-1, ITR-2, ITR-3, etc., to file income tax returns.

ITR-4 is an income tax return form that is used by taxpayers who are running a business or profession and have opted for the presumptive taxation scheme under Section 44AD, Section 44ADA, or Section 44AE of the Income Tax Act.

However, if the turnover of the above-mentioned businesses exceeds Rs. 2 crores, the taxpayer will have to file ITR-3.

Under this scheme, the taxpayer is not required to maintain detailed books of accounts and can declare income at a prescribed rate based on gross receipts. The applicable rates for different businesses and professions are provided in the Income Tax Act.

Download ITR 4


Budget 2023 Update

Category Previous limits Revised limits
Sec 44AD: For small businesses Rs. 2 crore Rs. 3 crore*
Sec 44ADA: For professionals like doctors, lawyers, engineers, etc. Rs. 50 lakh Rs. 75 lakh*

Please note:- This will be applicable from FY 2023-24 (AY 2024-25)


What is the Eligibility Criteria for Filing ITR-4?

  • The taxpayer should be an individual, HUF, or partnership firm.
  • The taxpayer should be a resident of India.
  • The taxpayer should have income from business or profession.
  • The taxpayer should have opted for the presumptive taxation scheme under Section 44AD, Section 44ADA, or Section 44AE.
  • The total income of the taxpayer should not exceed Rs. 50 lakh.
  • The taxpayer should not have income from more than one house property.
  • The taxpayer should not have income from capital gains except from the sale of assets mentioned in Section 44AD(1).
  • The taxpayer should not have any income from lottery, racehorses, legal gambling, or any other speculative business.

Who are Not Eligible to File ITR-4?

Here are some taxpayers who are not eligible to file ITR-4:

  • Companies
  • LLPs (Limited Liability Partnerships)
  • Individuals who have income from sources other than those eligible for the presumptive taxation scheme
  • Individuals who have income exceeding Rs. 50 lakhs in a financial year
  • Individuals who are either directors in a company or have invested in unlisted equity shares.

Major changes in ITR-4 form for AY 2024-25

Given below are the changes introduced in the ITR 4 Form for AY 2024-25 -

  • As per the amendments made in 115BAC, the new regime is now the default regime for individuals, HUF, AOP, BOI and AJP. Taxpayers opting for old regime have to explicitly opt-out of it by filing Form 10-IEA.
  • ITR Form 4 has been revised to incorporate a section for declaring deductions eligible under Section 80CCH. Introduced by the Finance Act 2023, Section 80CCH enables individuals enrolled in the Agnipath Scheme and contributing to the Agniveer Corpus Fund from November 1, 2022, to claim tax deductions for their total fund deposits.
  • Furthermore, the Finance Act 2023 has raised the turnover threshold for qualifying for the presumptive taxation scheme in Section 44AD from Rs. 2 crores to Rs. 3 crores, provided cash receipts do not exceed 5% of the total turnover or gross receipts of the previous fiscal year. Additionally, Section 44ADA saw an amendment, increasing the gross receipt threshold from Rs. 50 lakhs to Rs. 75 lakhs, with the same condition regarding cash receipts not exceeding 5%. To reflect these alterations, ITR-4 now includes a new section in Schedule BP for reporting "receipts in cash," with cash defined to include cheques or bank drafts not marked as account payee.

How to File ITR-4 Form Through Income Tax Portal?

You can file ITR 4 using the following 2 methods -

  • Online - e-filing portal
  • Offline - offline utility

Given below are the steps you must follow to submit the ITR 4 in online mode -

Step 1. Login to the e-filing portal using your ID and Password.

e-filing portal

Step 2. On your dashboard click e-file > Income Tax Returns > File Income Tax Return.

Note: If your PAN isn't linked with Aadhaar, you'll receive a warning message about its inoperability. To link PAN with Aadhaar, click the "Link Now" button. Otherwise, click "Continue."

Continue Continue

Step 3. Select the Assessment year for which you are filing ITR 4 and the mode of filing. Now, click on ‘Continue.”

Assessment year

Note: If you have already filled out your Income Tax Return and it is awaiting submission, click "Resume Filing." If you prefer to discard the saved return and begin preparing a new one, click "Start New Filing.

Resume Filing

Step 4. Select the status that applies to you and click ‘continue’.

‘continue’

Step 5. If you're unsure about which ITR to file, you can choose the wizard-based return filing by clicking the "Proceed" button. The system will guide you in determining the correct ITR, and then you can proceed with filing.

which ITR to file

However, if you already know which ITR to file, simply select the appropriate Income Tax Return from the dropdown menu and click "Proceed with ITR-4.

Income Tax Return

Step 6. Read the instructions and fill out the form. Now click on ‘Let’s get started’ and note down the documents required.

documents required

Step 7. review the pre-filled data and make any necessary edits. Enter any remaining or additional data as needed. Once you've completed each section, click "Confirm" to proceed.

pre-filled data

Step 8. Choose "Yes" if you have ever opted for the new tax regime in earlier years; otherwise, select "No." If "Yes" is selected, specify the Assessment Year (AY), provide the date of filing of Form 10 IE, and enter the Acknowledgement number.

new tax regime

If you opted out of the new tax regime in later years after initially opting in, select "Yes" in "Have you ever opted out of new tax regime"; otherwise, select "No." If "Yes" is chosen, indicate the Assessment Year (AY), provide the date of filing of Form 10 IE, and enter the Acknowledgement number.

Assessment Year

If you haven't chosen the New Tax regime in previous years, select "No." For the current year, choose the "Opting in now" option if you wish to opt in for the New Tax Regime; otherwise, select "Not Opting.

New Tax regime

If you choose the new tax regime, a pop-up will appear indicating that you will not be eligible for certain deductions and allowances. Click "Proceed" to continue.

Proceed

provide the Acknowledgement Number and the date of filing of Form 10IE, as they are prerequisites for opting for the new tax regime, especially for individuals with business income

Acknowledgement Number

Step 9. Input your income and deduction details in the respective sections. Once you have completed and confirmed all sections of the form, click "Proceed" to continue.

Proceed

If you have a tax liability, you will be presented with a summary of your tax computation based on the information provided. If there is tax payable according to the computation, you will see the options "Pay Now" and "Pay Later" at the bottom of the page. It is advisable to utilize the "Pay Now" option.

Pay Now Pay Now

By choosing "Pay Later," you can settle the payment after filing your Income Tax Return. However, there's a risk of being categorized as an assessee in default, which may lead to liability for interest on the tax payable.

Step 10. If there is no tax liability (No Demand / No Refund) or if you are eligible for a refund, you will be directed to the Preview Return page.

Pay Later

Step 11. Upon successful payment through the e-Filing portal, a confirmation message will be displayed. Click "Back to Return Filing" to finalize the filing of your Income Tax Return.

e-Filing portal

Step 12. Click Preview Return.

Click Preview Return

Step 13. On the "Preview and Submit Your Return" page, your place, name, and other details will be automatically populated. Select the declaration checkbox and then click "Proceed to Preview."

Preview and Submit Your Return

Note: If you have not engaged a tax return preparer or TRP in preparing your return, you can leave the textboxes related to TRP blank.

Step 14. Review your return and click "Proceed to Validation."

textboxes related to TRP blank

Step 15. After validation is completed, click "Proceed to Verification."

Note: You will be presented with a list of validation errors in your return, if any. You must return to the form to correct these errors. If there are no errors, you can proceed to e-Verify your return by clicking "Proceed to Verification."

Proceed to Verification

Step 16. On the "Complete your Verification" page, choose your preferred verification option and then click "Continue."

Verifying your return is mandatory, and e-Verification (the recommended option - e-Verify Now) is the easiest method. It's quick, paperless, and safer than sending a signed physical ITR-V to the CPC by speed post.

Complete your Verification

How to File ITR-4 Form Through Tax2win?

Tax2win offers two types of ITR filings:-

DIY (Self-filing)

DIY (Self-filing)- If you have a little bit of knowledge about taxes, entering some basic details will let you file the ITR within 4 minutes. Tax2win DIY platform is AI-integrated, hence it will auto-select the right ITR form for you itself and thus makes filing super-easy for you. The user interface is friendly and easy. Hands-on today to file ITR for FY 2023-24 and e-verify on time.

If you are wondering how to file an ITR with Tax2win, here are some simple steps you need to follow -

Step 1: Either sign in to the tax2win website using your existing credentials or sign up to the portal and create an account. You can do self-filing only in the case of income from salary, business, and capital gains.

tax2win website

Step 2: After logging in, a table consisting of all the possible sources of income opens. You need to select the income sources that you have. Based on your sources of income, Tax2win’s DIY ITR filing system selects the applicable ITR form automatically.

sources of income

Step 3. Select the F.Y. and enter the PAN Details and DOB. (If you don’t have a registered account with the Income Tax Department, you will receive an OTP, and a new account will be created.). You can also choose if you want our DIY software to fetch your personal details and get data pre-filled.

enter the PAN Details

Step 4: Enter a few basic details in the next step. Some of it is pre-filled from the Income Tax Department’s database. Remember to cross-check the information available. As shown in the image given below, you have to enter your personal details like name, email ID, date of birth, father’s name, gender, etc.

enter the PAN Details

Step 5: In the next step, you have to provide your address details and employer category. You can refer to the image below to understand this better.

basic details

Step 6. If you have opted for the presumptive income scheme, enter your income details and click on ‘Continue”.

address details and employer category

Step 7: Enter the details of the investment made during the year to calculate the applicable deductions. You have to enter details of investments in PPF, LIC, PF, housing loan, FDR, NSC, tuition fees, premiums paid to the annuity, and other 80C deductions. Also, you can claim deductions like 80D, 80CCD (1B), 80G, etc.

employment details

Step 8: In this step, you are required to enter your bank details. Enter your IFSC code, name of the bank, account number, and Aadhaar details. As per government law, it is mandatory to show all the bank details. You can select one account as the primary account. Remember, you will get a tax refund in your primary bank account.

details of the investment

Step 9: In this step, you have to upload Form 26AS, and your TDS details will be auto-populated. If you don’t have Form 26AS, you can skip it and fill in the details manually before filing your ITR. If you have paid the tax, select yes on Advance Tax and self-assessment tax paid, enter the challan details and other details about the taxes already paid and click on continue.

bank details

Step 10: Select the return filing type. If it is your first time filing ITR for the relevant assessment year, then select original return and click on continue.

upload Form 26AS

Step 11: Based on the information given by you in the previous sections, the software automatically computes your tax liability using both the old and the new regime. You can compare both regimes and select the one that is more beneficial for you.

Note: Tax2win’s ITR filing Software selects the ITR-form applicable based on the information available. In this case, it will select ITR-4.

return filing type

Step 12: Remember to cross-check all the information in return, click on the checkbox, and click on “File my return.” And here, you are done with filing. Don’t forget to e-verify the ITR at the same time. Remember to e-verify your return within 30 days.

Step 13: In this step, you have to authorize Tax2win as your e-filer using the Aadhaar OTP verification process. You have to enter the OTP received on your registered mobile number and a success message will be displayed.

tax liability

Step 14: In this step, your ITR has been filed successfully. Now all you need to do is e-verify your ITR by clicking on ‘Proceed for e-verification’. Upon e-verification, you will receive your ITR-V through email from the Income Tax Department.

e-verify your ITR

Step 15: Select the mode of e-verification by selecting Aadhaar, Demat, or Bank a/c and you will receive the message of successful e-verification.

File my return

File ITR Now

The second way through which you can file ITR on Tax2win is:-

Expert-Assisted ITR Filing

Step 1. Click on Hire eCA Now.

Click on Hire eCA Now

Step 2. First, register on Tax2win’s website and then click on ‘Hire your personal eCA Now”.

register

Step 3. Choose from where your income is and click on next.

income

Step 4. Select how many employers you have and click on next.

employers

Step 5. Select if you have business or professional income and click on next.

business

Step 6. Select if you own a house or not and click on next.

house

Step 7. Select if you have any income from capital gain or not and click on next.

income from capital gain

Step 8. Click on ‘hire now’ and get an eCA for your help at just Rs.499.

hire now Book Your eCA Now

What is the Structure of ITR-4?

Part A: Personal Information & Filing Status

The first part of this form is related to the personal information of the assessee, such as

  • Name,
  • PAN,
  • Address,
  • Date of Birth,
  • Aadhar no.
  • Email and
  • Mobile number, etc.

The next part shows the filing status of the return, i.e., whether it is a revised return or return in response to some notice issued by the income tax department or a return filed by the assessee himself or by any of his representatives and details of such representative.

Part B: Gross Total Income

Now comes the part for the calculation of Gross Total Income. It is the aggregate of income calculated under all different heads of Income.

Income from Business and Profession is calculated in the schedule on a presumptive basis based on the relevant section.

Income taxable under the head ‘Salary’: it is to be calculated the same as in the case of ITR-1. First, determine the monetary and non-monetary part of the salary and then deduct the allowance exempt under section 10. Then allow deduction under section 16, i.e., standard deduction, entertainment allowance, professional tax. To get the amount chargeable to tax under the head income from “Salaries.”

Income from House Property: Calculation of income from house property where maximum loss that can be set off in a period is limited to Rs. 2 Lakhs.

Other sources: Income from other sources can be calculated by specifying the source of such income from the drop-down list. After that, a standard deduction u/s 57 (iia) is available toward the family pension.

Part C: Deductions and Total Income

Now, allow for deduction under Chapter- VIA of the Income Tax Act 1961. The quantum of such deduction is based on the amount invested by the assessee.

Deductions and Total Income

Now, calculate the tax liability based on the income tax slab applicable to the income group of the assessee. And allow for Rebate u/s 87 A if income is less than Rs. 3.5 Lakh. And allow for Relief u/s 89 in respect of salary arrears received.

Schedule BP of ITR 4 – Sugam

The schedule for calculating Business Income is as follows:

  • The first set of presumptive income is for Business income under section 44AD.
  • Presumptive income of Profession is covered under section 44 ADA
  • And for goods carriage, the presumptive income is calculated under section 44 AE.
  • It also contains a column for information regarding Turnover/ Gross Receipt reported for GST.
  • After that, it also contains financial particulars for Business.
Schedule BP Schedule BP Schedule BP

Please enter details of Financial particulars in below screen

details of Financial particulars

TDS Schedule under Indian Income Tax Return form ITR 4

Part 19 is related to the Tax Deducted at source from salary. This schedule is populated using the Form 16 issued by the Employer. It incorporates details such as:

  • TAN of deductor,
  • Name of the employer,
  • Income under Salary, and
  • Tax deducted thereon.
20 TDS

Part 20 TDS 2(i) is for TDS on Income other than Salary as per the Form 16A furnished by the deductor.

20 TDS

And Part 20 TDS 2(ii) is for TDS on Rent and as per Form 16C TDS certificate for Rent.

Schedule IT of Income Tax Return Form ITR 4

Part 21 is for providing details regarding the payment Advance Tax during the year and self-assessment tax paid at the end of the period. This Schedule requires the assessee to fill the information given on the payment challan such as BSR Code, Serial Number of Challan, date of payment, amount, etc.

21 Sch IT

Schedule TCS of Income Tax Return Form ITR 4

TCS Schedule 22 consists of details regarding the Tax Collected at the source and as mentioned in the Form 27D issued by the collector.

22 Sch TCS

Part 21 is for providing details regarding the payment Advance Tax during the year and self-assessment tax paid at the end of the period. This Schedule requires the assessee to fill the information given on the payment challan such as BSR Code, Serial Number of Challan, date of payment, amount, etc.

Schedule – Taxes Paid and Verified of Income Tax Return Form ITR 4

In the next schedule, the total tax liability that the assessee is required to pay is automatically calculated. Such liability is calculated after considering the details furnished in the previous schedule. Net liability or refund is calculated by taking the difference of total tax paid from tax liability calculated based on income.

  • Column / Part 28 is for providing the bank account details of assessee held in India at any time during the previous year but not including the dormant accounts.
  • The above bank account details are followed by the Declaration regarding true and fairness of the information provided. And filing the return in the capacity of Self, Karta, Representative, and Partner.
  • If the Tax return Preparer prepares the return, the details of such TRP is to be provided along the amount to be paid to TRP.

Schedule 80G of Indian Income Tax Return Form ITR 4

The Last schedule is to calculate the total amount of deduction to be claimed under section 80G for contributions/ donations made to the charitable institutions.

  • The First two parts are for calculating deductions without any qualifying limit specified under the law. The listing is to be made as the donations eligible for 100% deductions and includes details of the donee and type of donation made.
  • After that donation eligible for a deduction of 50% of the donated amount. Schedule 80G
  • The next two parts i.e, C & D are for donations having qualifying limit as specified under the Income Tax Act 1961. Schedule 80G
  • Part E reflects the cumulative deduction amount claimed under section 80D.

Verification of ITR-4

After successful filing, the income tax return needs to be verified. The verification is required to be done within 30 days of filing ITR. It can be done online i.e. e-verification through an OTP (One Time Password) or EVC (Electronic Verification Code). Alternatively, the offline process can be followed by sending the signed copy of ITR V to CPC Bangalore. For more details refer to our guide on How to verify your Income Tax Return.

For further details on ITR forms Read More.


What are the Different Ways of Submitting ITR 4?

There are two options to file ITR-4 :

  • 1- Paper Form: It can be filed in a physical form or by furnishing bar coded return. Paper Form ITR is allowed in only in case of super senior citizen.
  • 2- Electronically: Return can be filed on the e-filing portal of the Income Tax Department. After filing, the return needs to be verified through
    • Digital signature or
    • Authenticating by EVC or
    • By sending ITR-V (duly signed) by post to CPC in 30 days
    Income Tax Return Form ITR 4

Filing your ITR 4 form all by yourself can be a time-consuming and daunting process. The ITR filing season for FY 2023-24 has started. You can contact our tax experts to get accurate ITR filing and avoid penalties and notices. Get CA-Assisted ITR Filing Services Now!


FAQs on ITR 4

Q- Do I need to file ITR-4 if my income is less than the threshold limit but the total electricity bill paid during the year is Rs. 1,05,000/-?

Yes, for FY 2023-24 ITR-4 needs to be filed in this case, even if income is less than the threshold limit.


Q- Can I file ITR-4 if audit u/s 44AB is applicable to me?

ITR-4 is a simplified form that cannot be filed by the individuals to whom the audit is applicable.


Q- Am I eligible to file ITR-4 if I am a joint owner of house property?

For FY 2020-21 ITR-1 & ITR-4 cannot be filed by an individual who is a joint owner of a house property. For FY 2021-22 you can file ITR 4 in this case.


Q- What is Presumptive Income?

As the name suggests, under the presumptive method of taxation no actual computations for determining the profits or losses of the businesses are made. The turnover is reported, and a certain percentage of it is taken as taxable income for the year. In the case of business u/s 44AD minimum 6% of the business turnover is required to be reported as taxable income in case the transaction is undertaken through electronic modes and 8% otherwise. To learn more about presumptive income and taxation Read More.


Q- Is it compulsory to file the ITR4 form for 5 consecutive years once filed in a particular year?

If a taxpayer is opting for Presumptive scheme as per section 44AD then he/she shall have to file ITR4 for 5 consecutive years.


Q- The new ITR-4 is requiring GST as mandatory to file an ITR. But I have not registered under the GST. How should I file my ITR?

ITR 4 can also be filed if taxpayers are not registered under GST Law.


Q- What is the procedure if I submitted the ITR-4 form instead of an ITR-1 form?

If the wrong ITR Form has been filed, then the return is a defective return, to make it validate, file the revised return. The last date for revised return is the end of the 31st December


Q- I am a salaried person. I also deal in share trading. Which ITR should I file?

ITR Form will depend whether the taxpayer intends to show share trading as capital gain or Business Income.


Q- Which ITR (1 or 4) form has to be filed if a doctor gets a salary from a private hospital and also receives the form 16A?

Doctor needs to file ITR 4 if he received form 16A, then he should be filed ITR 1


Q- How should I file an ITR-4 if the only income I have comes from tuition and house rent?

Taxpayers can consider his tuition income as business covered u/s 44ADA and can file his return accordingly.


Q- Can I file the ITR 4 under 44ADA if I filed the ITR 3 last year which was the first year of filing? The 5 years limit is for 44ADA as well.

Yes, Taxpayers can file ITR 4 if she/he filed ITR3 last year and the limit of 5 years is not applicable on Sec. 44ADA


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.