What is ITR-4? The Income Tax Return (ITR) form 4 is used by taxpayers who are individuals, Hindu Undivided Families (HUFs), and small businesses to file their tax returns in India. It is specifically designed for taxpayers who earn income from business or profession under a presumptive taxation scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act.
ITR-4 is intended for individuals and HUFs who meet the following criteria:
Presumptive Income:
Income from Business or Profession:
Income from Salary/Pension, House Property, or Other Sources:
No Income from Capital Gains:
No Carry Forward of Losses:
Section 44AD (Presumptive income for small businesses):
Section 44AE (Presumptive income for businesses in goods carriage):
Section 44ADA (Presumptive income for professionals):
Before you file ITR-4, make sure you have the following documents handy:
PAN Card: Personal identification for tax purposes.
Aadhar Card: For linking with the PAN (mandatory).
Bank Account Details: Bank statements for verifying income and tax credits.
Form 16: Issued by the employer for salaried individuals (if applicable).
Balance Sheet: If applicable, for businesses opting for other methods of accounting.
Details of Business Income: For those filing under presumptive taxation.
Tax Paid: Tax receipts and challans if advance tax or self-assessment tax has been paid.
Other Income Details: Any income earned from investments, savings accounts, or other sources.
Here’s a step-by-step guide to filing ITR-4 online:
You must access the official Income Tax e-filing portal through your internet browser.
Users who do not have an account should use their PAN to make a new profile. The login process will be easy for registered users to access their account through their authentication details.
Once logged in, click on ‘File Income Tax Return’.
Select ITR-4 as the form for filing.
Ensure you are selecting the correct assessment year for which you are filing.
Fill in personal details such as name, address, PAN, and contact information.
Input details about income under Presumptive Taxation Scheme (Sections 44AD, 44AE, or 44ADA).
Report your income from business or profession. If you are claiming presumptive income under Section 44AD, input the total turnover and ensure the correct percentage of income is calculated.
The portal will automatically calculate your tax based on the income entered.
Input details of advance tax, TDS (Tax Deducted at Source), or self-assessment tax paid.
Review all the details entered for accuracy.
Once verified, submit the form electronically.
After submitting the return, verify it using one of the available methods (Aadhaar OTP, Net Banking, or by sending a signed copy of ITR-V to the Income Tax Department).
Simplified Tax Filing: Small businesses and professional taxpayers under presumptive tax requirements use ITR-4 as their simplified tax filing form.
Presumptive Taxation Benefits: Business owners can forego complex accounting responsibilities as their income gets determined with easy calculations of recorded transactions.
Faster Refund Processing: Using an online filing method speeds up the processing of tax refunds when applicable to taxpayers.
Avoid Penalty: The prompt filing of ITR-4 helps you steer clear from payment penalties because of delayed submission.
Tax Credit Carry Forward: The system enables loss transfer with specific restrictions however it does not permit business loss transfer under ITR-4.
Incorrect Income Reporting: Ensure that all income from your business or profession is reported accurately, especially if you are opting for presumptive taxation.
Failure to Verify the Return: After submission, remember to verify your ITR. If you don't verify it, the return will be invalid.
Incorrect Selection of ITR Form: If your income includes capital gains or income from other sources, don’t file ITR-4; use ITR-2 or ITR-3 instead.
Missing Tax Deductions: Don’t forget to claim any deductions under sections like 80C, 80D, etc., if applicable.
Individuals need to file their ITR-4 through the specified deadline which falls on 31st July until the Income Tax Department extends it.
Making ITR-4 submissions serves as an essential requirement for taxpayers who must adhere to Indian tax guidelines. A clear grasp of the tax return process together with all necessary documents and eligibility criteria enables users to file their statements timely thereby obtaining maximum tax advantages while following tax regulations. Regular updates to your records should always be maintained while consulting tax professionals when needed to prevent filing errors.
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