What is ITR 4 in Income Tax?

  • Author :
  • TATA AIG Team
  • Published on :
  • 08/12/2023

Among the seven ITR forms available for filing returns, the ITR 4 form (Sugam) is for Resident Individuals, Hindu Undivided Families (HUFs), and Firms except LLPs with a net income not exceeding ₹50 lakhs.

While there are many other terms and conditions, it is important to understand the eligibility norms and the process of filing ITR 4 online and offline before getting started.

In this article, we will talk about everything that you need to know about the ITR 4 Form and help you understand its essential details.

Form ITR 4 is for Whom?

ITR 4 is for individuals and firms who have opted for the presumptive income scheme as per the details specified in Section 44AD, Section 44AE, and Section 44ADA of the Income Tax Act, 1961.

This ITR for presumptive income can be used provided you meet the criteria outlined by the government.

Who is Eligible to File ITR 4?

You can use the ITR 4 Income Tax form for filing returns if you meet the following criteria:

  • You are a resident individual, HUF, or firm but not registered as an LLP.

  • The total income for the fiscal year is not more than ₹50 lakh.

  • You earn income from your profession or business on a presumptive basis under Section 44AD, Section 44AE, and Section 44ADA of the Income Tax Act, 1961.

  • Section 44AD allows small businesses with a turnover of less than ₹2 crore to declare 8% of their annual turnover as profits without maintaining books of accounts.

  • Section 44DA is for certain professionals where 50% of the gross receipts are considered to be profit and taxed accordingly. Also, Section 44AE applies to people in the business of hiring or plying goods carriages.

  • You own one house or property.

  • Your main sources of income are from salary, pension, or agriculture (up to ₹5,000).

  • The other sources of income include one or more of the following:

a. The interest earned on your Savings Accounts or Deposits held with a bank, post office, or cooperative society.

b. Family pension

c. The interest earned on an Income Tax refund.

d. Any other interest income.

  • Any income from lottery or horse racing is not included.

  • To understand ITR 4 applicability in a better manner, let us look at who cannot use ITR 4 for siling returns.

Who is Not eligible to File ITR 4?

The following entities are not eligible to file ITR 4:

  • Companies or Limited Liability Partnerships (LLPs).

  • Non-Resident Indians or Resident Not Ordinarily Resident Indians.

  • Individuals, HUFs, or firms who:

  • Have an income of more than ₹50 lakh

  • Have an agricultural income of more than ₹5,000

  • Is a Director of a company

  • Have income from more than one property

  • Have an income of the following nature:

  • Lottery winnings

  • Owning and maintaining racehorses

  • income taxable at special rates u/s115BBDA or Section 115BBE

  • Have held unlisted equity shares at any time during the year

  • Have received ESOPs from the employer and have deferred income tax from the organisation.

  • Individuals, HUFs, or firms that have claimed a loss, tax relief, or tax deduction due to:

  • Carried forward losses

  • Tax relief claimed under Sections 90, 90A, or 91

  • Tax deduction claimed under Section 57

Format of ITR 4

Here is a quick look at the structure of the ITR 4 form. This will help you familiarise yourself with the form making it easier to fill out while filing returns.

<td>Filing status: Individual, HUF, Firm.</td>
<td>Contact information: Phone numbers, Email.</td>
<td>Previous filing details and exemptions.</td>
<td>Income from Salary and House Property.</td>
Section Description
Part A: General Information Personal details: Name, PAN, Date of Birth, Address, Aadhaar.
Part B: Gross Total Income Breakdown of income from Business and Profession.
Part C: Deductions and Taxable Total Income Deductions under various sections like 80C, 80D, etc.
Part D: Tax Computations and Tax Status Calculation of Tax Payable, Rebates, and Cess.
Schedule BP: Business or Profession Details Details of turnover, presumptive income, and GST information.
Schedule IT: Advance Tax and Self-Assessment Tax Payments Details of tax payments made during the financial year.
Schedule TCS: Tax Collected at Source Information related to tax collected at source.
Schedule TDS-1: Details of Tax Deducted at Source from Salary Information about TDS from salary as per Form 16.
Schedule TDS-2: Details of Tax Deducted at Source on Income Other Than Salary Information about TDS on income other than salary.
Verification Section Declaration by the taxpayer and space for signature.
TRP Details (if applicable) Details of Tax Return Preparer, if used.

How to File ITR 4?

You can file ITR 4 online or offline. Here are the details:

Filing ITR 4 Offline

  • First, it is important to note that the offline filing of ITR 4 is not available to everyone. It is permitted only in the following cases:

  • The individual is more than 80 years old

  • The income is not more than ₹5 lakh per annum

  • There is no requirement to claim an ITR refund

  • Here is a quick look at the process of filing ITR 4 offline:

  • Get a physical copy of the ITR 4 form

  • Fill out the form carefully and make sure that the information provided is accurate and error-free.

  • Attach the bar-coded return provided with the form

  • Gather all required supporting documents

  • Submit the form and documents at the Income Tax Office

  • Receive the acknowledgement of the filed returns

Filing ITR Using Offline Utility

  • You can download the Offline Utility available on the official website of the Income Tax Department. This allows you to file your returns by uploading a file generated by the Utility. Here are the steps:

  • Login to the e-filing portal and click on e-File. Go to Income Tax Returns. Select File Income Tax Return option. Choose the Assessment Year and Mode of Filing – Offline.

  • Under the Offline Utility option, click Download

  • Install the Utility and open it

  • Click “File Returns”

  • Select the tab “Download Prefilled Data”

  • Provide the login credentials and the utility will download your data.

  • Check the downloaded data and edit or fill out any missing or incorrect details.

  • Once you have completed all the sections, upload the file.

  • You will have to verify your returns to file them

File ITR 4 Online

  • E-filing income tax return ITR 4 is the most popular way of filing returns. Here are the steps:

  • Login to the e-filing website of the Income Tax Department.

  • Click on e-File > Income Tax Returns > File Income Tax Return.

  • Select the relevant Assessment Year and select the Mode of Filing as Online.

  • Select if you are an individual, HUF, or other entity.

  • Select ITR 4 from the dropdown.

  • Most fields will be prefilled. Check and validate the information and make changes wherever needed.

  • The last step is to e-verify the ITR and receive the acknowledgement.

Summing Up

We hope that this article has shed light on Form ITR 4 and helped you understand the different ways in which you can file your returns. If you are opting for the old tax regime, then you have the option of availing tax deductions for various investments.

These include tax deductions for a health insurance plan. TATA AIG offers an option to help you buy health insurance online in a hassle-free manner.

To find the best one for your needs and budget, compare health insurance providers and plans. Remember, a medical insurance plan offers financial protection during medical emergencies and tax benefits too.

FAQS

How is income tax calculated in ITR 4?

The tax is calculated by computing the gross total income from different sources like salary, business, property, and other specified income sources.

Next, deductions, rebates, and relief are calculated and subtracted from the gross income. Any applicable interest and fees are added to get the final tax amount.

Can you show capital gains in ITR 4?

No, there is no option to show capital gains in ITR 4. As per the eligibility criteria, individuals, HUFs, and firms with specified income sources are only allowed to file returns using the form ITR 4. These sources do not include capital gains. In such cases, you can consider Form ITR 3 or ITR 2.

Can we change ITR 1 to ITR 4?

If you have erroneously filed the wrong ITR, then you have the option of filing a revised return before the end of the Assessment Year or before the completion of the assessment.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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