The ITR-4 form is also called the ‘Sugam’ form. ITR-4 applies to a resident individual, HUF, and partnership firm (other than a limited liability partnership).
ITR-4 is especially for people who have opted for presumptive taxation.
Presumptive taxation is given under sections 44AD, 44ADA, and 44AE of the Income-tax Act, 1961 (or ‘the Act’). A summary of these sections is shown below:
Particulars | Section 44AD | Section 44ADA | Section 44AE |
Applicability | Small business owners having turnover or gross receipts as mentioned below. | Every person carrying on legal, medical, engineering architecture professions or an accountant, technical consultant, interior decorator, movie artist, or any other profession as notified by CBDT. | Any person carrying on businesses related to leasing, plying, or hiring goods carriages. Maximum owner of 10 goods-carrying vehicles. |
Maximum turnover limit | Turnover or gross receipts up to Rs. 2 crores. In case 95% of receipts are received via online modes, then the limit is Rs. 3 crores. | Total gross receipts up to Rs. 50 lakhs. In case 95% of receipts are received via online modes, then the limit is Rs. 75 lakhs. | - |
Non-applicability | a person covered under 44AA (doctors, lawyers, engineers, architects, etc), or earning income like commission or brokerage, or carrying on any agency business or carrying on the business of plying, hiring or leasing goods carriages | Any person other than mentioned above | Any person other than mentioned above |
Deemed income | 8% of total turnover or gross receipts. In case the amount is received by an account payee cheque or an account payee bank draft or use of an electronic clearing system, income will be 6% of such total turnover or gross receipts. An amount higher than 8% of turnover or gross receipts can also be declared as income. | 50% of total gross receipts. | - Rs 1,000 per ton per gross vehicle weight for vehicle weight of more than 12,000 Kgs) per month; and - Rs 7,500 for any vehicle other than above per month |
Expense deduction | No other deductions of business expense are allowed. | No other deductions pertaining to profession are allowed. | No other deductions of business expense are allowed. |
No. of years | Compulsory to opt for this section for 5 consecutive years. If you opt out of this section, you cannot declare income under this section for the next 5 years. | Not compulsory to opt for this section for 5 years. | - |
Books of accounts | No need to maintain books of accounts. No need for an audit of books. If income lower than 8%/6% of turnover or gross receipts is declared then the person has to maintain books and get them audited. | No need to maintain books of accounts. No need for an audit of books. If income lower than 50% of gross receipts is declared then the person has to maintain books and get them audited. | No need to maintain books of accounts. No need for an audit of books. If income lower than prescribed limit then the person has to maintain books and get them audited. |
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Who can and cannot file ITR 4?
ITR-4 can be filed by a resident individual, HUF and partnership firm (other than a limited liability partnership) having:
- Income up to Rs. 50 lakhs;
- Income from salary/ pension - This includes income from salary, allowances, pension, etc;
- Income from one house property - This includes rent income received from tenants of one house property;
- Income from business and profession – There is a concept of presumptive taxation under income tax. This presumptive taxation is optional. Small business owners and professionals can opt for this taxation. No books are required to be maintained and audited in these sections. This taxation is given under sections 44AD, 44ADA and 44AE of the Income-tax Act, 1961. Only people paying tax under this taxation can file ITR-4;
- Income from other sources – This includes interest earned from a savings bank account, fixed deposits, family pension, etc. Winnings from lotteries, horse races are not covered here;
- Agriculture income (up to Rs. 5,000).
ITR-4 cannot be filed by an individual, HUF, partnership firm (other than limited liability partnership) having:
- Residential status of ‘Resident but Not Ordinarily Resident’, or ‘Non-Resident Indian’;
- Income of more than Rs. 50 lakhs;
- Agricultural income of more than ₹5,000;
- Directorship in a Company;
- Income from more than one house property;
- Income from lottery, horse races, some income taxable at a special rate (like section 115BBE);
- Unlisted equity shares;
How to file ITR-4?
Step 1: Visit this link and log in using your user ID and password
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Step 2: Go to the ‘E-file’ section > click on ‘Income tax Returns’ > click on ‘File Income Tax Return’
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Step 3: Select the relevant assessment year and mode of filing as online > click on ‘Continue’
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Step 6: Select ITR-4 from the drop-down under the section ‘I know which ITR Form I need to file’ > click on ‘Proceed with ITR 4’
Step 8: Review the pre-filled data in all schedules and fill the data as required. Click on ‘Confirm’ for each schedule.
Step 10A: In case of tax liability, click on ‘Pay Later’ or ‘Pay Now’ for payment of tax. It is advisable to pay tax immediately
Step 10B: In case of no payment of tax click on ‘Preview return’
Step 12: Click on ‘Proceed to validation’ after checking the return
Step 13: After validation > Click on ‘Proceed to Verification’
Step 14: Select the option to verify return > click on ‘Continue’
FAQ Section: How to File ITR 4 Online: A Step-by-Step Guide
1. Who can file ITR-4?
ITR -4 can be filed by a resident individual, Hindu undivided family, firm (other than a limited liability partnership) having income up to Rs. 50 lakhs in a financial year. ITR-4 is especially for people opting for presumptive tax under section 44AD, 44ADA or 44AE of the Income-tax Act, 1961. Other incomes can include income from salary/pension, one house property, other sources (excluding lottery winnings, horse races) and agricultural income (up to Rs. 5000).
2. What is the difference between ITR-4 and ITR-5?
The key difference is that ITR-4 can be filed for income up to Rs. 50 lakhs only. Further ITR-5 is to be filed by specified persons such as Firms, Limited Liability Partnerships, Association of Persons, Body of Individuals, etc.
3. How much time does it take to file an ITR-4 online?
ITR-4 can be filed online in an hour’s time. This is assuming all supporting documents like Form 16, Form 26AS, bank statements etc are available.
4. Can we revise ITR-4 after verification?
Yes, ITR-4 can be revised even after verification. However, the revised return must be filed within the prescribed due date.