A Guide to File ITR-4 Online for the AY 2024-2025

The ITR 4 Form, also known as the Sugam form, is tailored for taxpayers under the presumptive income scheme as per Sections 44AD, 44ADA, and 44AE of the Income Tax Act. This form is a necessity for those who are eligible under these sections. On the other hand, businesses with an annual turnover exceeding Rs. 2 Crores should use the ITR-3 form. In some cases, the ITR-5 form may also be required. In this article, we will look into the procedure for ITR 4 return filing for the AY 2024-2025 in detail. For assistance in ITR 4 return filing, IndiaFilings provides expert services. We can ensure that the filing process is both smooth and accurate.

What is ITR-4?

ITR-4, also known as Sugam, is an Income Tax Return form in India specifically designed for individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding Limited Liability Partnerships) who meet certain criteria. These criteria include opting for the presumptive taxation scheme under sections 44AD, 44ADA, or 44AE of the Income Tax Act, 1961. This scheme allows them to declare their income at a pre-determined rate instead of maintaining detailed accounts. However, there are limitations on total income and business turnover for using ITR-4.

ITR 4 Filing Form is for Whom?

ITR-4 is an Income Tax Return form in India designated for individuals, Hindu Undivided Families (HUFs), and firms (other than Limited Liability Partnerships or LLPs). This form is specifically used by those who opt for the presumptive income scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act. This scheme allows eligible taxpayers to estimate their income for tax purposes, simplifying their tax compliance process.

Presumptive Taxation Scheme

The Presumptive Taxation Scheme is a part of the Indian Income Tax Act, intended to simplify tax compliance for certain small taxpayers. This scheme is relevant for individuals and businesses involved in specific activities, as detailed in Sections 44AD, 44ADA, and 44AE of the Act. Under Section 44AA, detailed accounting records are normally required for these taxpayers. However, these sections provide an alternative by allowing eligible taxpayers to estimate their income at prescribed rates, reducing the need to maintain extensive financial records.

Section 44AD: This section is for Resident Individuals, Resident Hindu Undivided Families (HUFs), and Resident Partnership Firms (excluding LLPs). It applies to those engaged in certain business activities, allowing them to estimate their income if they meet certain conditions.
Section 44ADA: Aimed at Resident individuals in India who are professionals in fields specified under Section 44AA(1). These professionals can estimate their income under this scheme, subject to certain conditions.
Section 44AE: This applies to individuals, HUFs, firms (excluding LLPs), and both resident and non-resident entities involved in the business of plying, leasing, or hiring goods carriages. They can estimate their income under this scheme, provided they own no more than ten goods carriages during the previous year.

These schemes are particularly relevant for users of the ITR 4 return filing form, designed for those opting for the Presumptive Taxation Scheme under these sections.

Eligibility Criteria to file income tax return ITR 4

To be eligible for filing the SUGAM (ITR 4) form for the assessment year, taxpayers must meet specific criteria: Total Income: The taxpayer's total income should not exceed Rs. 50 lakh. The income must be derived from one or more of the following sources:

Income from Salary or Pension
Income from One House Property
Interest income and Income from the family pension are taxable under 'Other Sources.'
Income from a business is computed on a presumptive basis with a gross turnover of up to Rs. 2 crores.
Income from a business computed on a presumptive basis involving goods carriage (up to ten vehicles).
Income from a profession is computed on a presumptive basis under Section 44ADA (Gross receipt up to Rs. 50 lakh).

Important Notes: When income is computed on a presumptive basis under Sections 44AD, 44AE, or 44ADA, it is assumed to have accounted for all allowances, depreciation, losses, or deductions as per the Income-tax Act.

If losses are incurred after applying the proviso to sub-section 3 of Section 44AE, the taxpayer must file ITR-5 instead.
Suppose the taxpayer needs to include another person's income (like a spouse or minor child) with their own. In that case, the SUGAM form only applies if the additional income falls within the abovementioned categories.

Non-Applicability of ITR 4 SUGAM Form

The ITR-4 SUGAM form is not suitable for certain taxpayers, including:

Directors of a company
Individuals who have possessed unlisted equity shares at any time during the previous year.
Taxpayers with assets or financial interests in entities located outside India.
Individuals with signing authority in any foreign account.
Persons with income from sources outside India.

Additionally, the SUGAM form is not for individuals with the following types of income during the previous year:

Profits and gains from business and professions not computed under Sections 44AD, 44ADA, or 44AE of the
Income Tax Act, such as income from agency business, speculative business, commission, or brokerage.
Income from more than one house property.
Capital gains.
Income from lotteries.
Involvement in owning and maintaining racehorses.
Income is taxed at special rates under Sections 115BBDA or 115BBE of the Income Tax Act.
Income needs apportionment as per Section 5A.
Agricultural income exceeding Rs. 5,000.

This form is also unsuitable for individuals with claims related to:

Past losses or carry-forward losses in the "Income from house property" category.
Relief claims under Sections 9A, 90, or 91 of the Income Tax Act.
Loss under "Income from other sources."
Deductions under Section 57, except for family pension-related deductions.
Tax credit claims for tax deducted at source in someone else's name.

Procedure for Filing ITR-4 Form

There is a structured approach to file income tax return ITR 4 . Here's a simplified guide:

Download ITR Utility: First, obtain ITR-4 from the official Income Tax Department website.
Part A - Personal Information & Filing Status
- Personal Information: Fill in details like Name, PAN, Address, Date of Birth, Aadhaar Number, Email, and Mobile Number.
- Filing Status: Indicate if it's a regular return, a revised return, or a return filed in response to a notice. If filed by a representative, provide their details.
Part B - Gross Total Income
- Income from Business/Profession: Report this presumptively according to the applicable section.
- Income from Salary: Calculate by adding monetary and non-monetary parts, subtracting exempt allowances under section 10, and then deducting allowances under section 16 (standard deduction, entertainment allowance, professional tax).
- Income from House Property: Here, the maximum set-off loss is limited to ₹2 Lakhs.
- Other Sources: Detail the source of income and apply the standard deduction under section 57(a) for family pensions.
Part C - Deductions and Total Income
- Deductions are claimed under Chapter VIA of the Income Tax Act, 1961, based on the assessee's investments.
To calculate tax liability in the ITR-4 Form:
- Determine Tax Liability: Base this on the income tax slab rates relevant to the assessee's income bracket.
Rebate and Relief:
- Rebate Under Section 87A: Apply this if the income is below ₹3.5 Lakhs.
- Relief Under Section 89: Consider this for arrears of salary received.
- Schedule BP in ITR-4 - Sugam: This schedule is crucial for reporting business income.
- Business Income (Section 44AD): Here, calculate the presumptive income for businesses.
- Professional Income (Section 44ADA): Use this for the presumptive income of professions.
- Goods Carriage (Section 44AE): This calculates presumptive income from goods carriage.
- GST Information: Include details about Turnover or Gross Receipts reported for GST.
- Financial Particulars of Business: Provide financial details related to the business.
TDS Schedule under form ITR 4
- The TDS Schedule in the Indian Income Tax Return Form ITR-4 includes:
Part 19 - TDS from Salary:
- Data Source: Populated from Form 16, issued by the employer. Details to Include:
- TAN (Tax Deduction and Collection Account Number) of the deductor.
- Employer's name.
- Income under the head 'Salary'.
- Tax deducted from salary.
Part 20 TDS 2(i) - TDS on Income Other Than Salary:
- Data Source: Based on Form 16A provided by the deductor.
- Purpose: Covers tax deducted on sources of income other than salary.
Part 20 TDS 2(ii) - TDS on Rent:
- Data Source: From Form 16C, the TDS certificate for rent.
- Purpose: Addresses tax deducted at source for income from rent.
Schedule IT of Income Tax Return Form ITR 4
Schedule IT in the Income Tax Return Form ITR-4, specifically Part 21, is designated for reporting payments related to Advance Tax and Self-Assessment Tax. Key points include:
- This section captures details of Advance Tax paid during the financial year and any Self-Assessment Tax paid at the end of the period.
- Required Information: Assessees must fill in details as per the payment challan, which includes:
- BSR Code (Bankers' Serial Number Code).
- Serial Number of the Challan.
- Date of Payment.
- Amount Paid.
- Schedule TCS in the Income Tax Return Form ITR-4, known as Schedule 22, is dedicated to the details of Tax
Collected at Source (TCS). Key aspects include:
- Schedule TCS of Income Tax Return Form ITR 4
- In the Income Tax Return Form ITR-4, Schedule TCS (Schedule 22) and Part 21 have specific functions related to tax documentation:
Schedule TCS (Schedule 22):
- Purpose: This schedule records the Tax Collected at Source (TCS) details.
- Details to Include: Information as outlined in Form 27D, issued by the tax collector. This encompasses the amount of tax collected, the collector's name and TAN, and other pertinent details.
Part 21 - Advance Tax and Self-Assessment Tax Payments:
- Purpose: This part is for detailing payments of Advance Tax during the financial year and any Self-Assessment Tax paid at the end of the period.
- Information Required: Assessees need to enter details from the tax payment challan, which includes:
- BSR Code (Bankers' Serial Number Code).
- Serial Number of the Challan.
- Date of Payment.
- Amount Paid.
Schedule – Taxes Paid and Verified
- The "Schedule – Taxes Paid and Verified" section in the Income Tax Return Form ITR-4 is designed for calculating and verifying tax liabilities. Here's a breakdown of this schedule:
Calculation of Total Tax Liability:
- The schedule automatically calculates the total tax liability of the assessee.
- This calculation takes into account the details provided in the previous schedules.
- The net liability or refund is determined by subtracting the total tax paid from the calculated tax liability based on income.
Column/Part 28 - Bank Account Details:
- Assesses must provide details of all bank accounts held in India during the previous year, excluding dormant accounts.
Declaration of Information Accuracy:
- This section includes a declaration affirming the truth and accuracy of the provided information. It also covers the capacity for filing the return, such as Self, Karta, Representative, or Partner.
Details of Tax Return Preparer (TRP):
- If a Tax Return Preparer prepares the return, their details and the amount payable to them must be included.
Schedule 80G
- Schedule 80G in the Indian Income Tax Return Form ITR-4 is dedicated to deductions claimed for donations made to charitable institutions under Section 80G. The structure of this schedule is as follows:
Objective: This schedule is designed to calculate the total amount of deductions claimed for contributions or donations made to charitable organizations.
Parts for Calculation:
- First Two Parts: These are for calculating deductions that do not have a qualifying limit as specified under the law. It includes:
- Donations eligible for 100% deduction: Here, details of the donee (recipient of the donation) and the type of donation made are listed.
- Following this, donations that are eligible for a deduction of 50% of the donated amount are calculated.
Verification of ITR-4
- The verification of the ITR-4 form is a crucial step after filing your income tax return. Key points to note are:
- Time Frame for Verification: Verification must be completed within 30 days of filing the ITR.
Methods of Verification:
- Online Verification: This can be done electronically through e-verification. It involves the use of either an OTP (One Time Password) or an EVC (Electronic Verification Code).
- Offline Verification: Alternatively, you can opt for offline verification by sending a signed copy of the ITR-V form to the Central Processing Centre (CPC) in Bangalore.

ITR-4 Form for AY 2024-2025

Here's the ITR-4 filing form for the assessment year 2024-2025 for your reference, [pdf-embedder url="https://www.indiafilings.com/learn/wp-content/uploads/2023/12/itr4_FORM.pdf"]

Due Date for filing ITR-4

The deadline to file ITR-4 (SUGAM) for the AY 2024-2025 is set for July 31, 2024. Ensure to complete your ITR 4 filing before the deadline to avoid the penalty.

Latest Update on the Pay Later Option for Income Tax Filing

The Income Tax e-filing portal has recently rolled out a 'Pay Later' option, allowing you to complete your tax filing process before making any tax payments. You use the e filing income tax return itr 4 to complete your taxes. For additional information, please refer to our guide – Pay later option for the Income tax return filing.

What are the different ways of ITR 4 filing?

There are two primary methods for submitting ITR-4 filing form: Paper Form:

Eligibility: This method is only available for super senior citizens.
Process: The ITR can be filed physically or by furnishing a bar-coded return.

Electronically:

E-filing Portal: Submit the return via the Income Tax Department's e-filing portal.
Verification: After filing, the return must be verified, which can be done in one of the following ways:

Using a Digital Signature.

Authenticating with an Electronic Verification Code (EVC).
Sending a duly signed ITR-V form by post to the Central Processing Centre (CPC) within 30 days.

These options provide flexibility and convenience to taxpayers, with electronic submission being the more commonly used method. Offline Filing for Super Senior Citizens: Super senior citizens (individuals aged 80 years or more during the previous year) can file ITR-4 in paper form at designated offices of the Income-tax Department, along with duly signed Form ITR-V. Completing the ITR-V Form:

After e filing income tax return ITR 4 , print out the ITR-V Form.
The signed ITR-V Form should be sent by ordinary post or speed post to the Central Processing Centre, Income Tax Department, Bengaluru - 560500, Karnataka.

Offline Filing Method

Filing the Income Tax Return (ITR) offline involves submitting a physical paper form or a bar-coded return to the Income Tax Department in exchange for an acknowledgement receipt. This offline method is permissible under certain conditions:

The individual is 80 or older (qualifying as a super senior citizen).
The individual's income is less than Rs. 5 Lakh, and they do not have to claim a refund in the return.
Note: The Form ITR-V should reach the CPC within 120 days from the date of e-filing the return.
Confirmation of receipt of ITR-V at CPC will be communicated to the taxpayer through the email ID registered in the e-filing account.

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