ITR-4 Form - For presumptive income from Business & Profession


What is ITR 4 Form used for?


ITR-4 Form is an Income Tax Return form that is used by the taxpayers who have opted for presumptive income scheme under Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act. In case, a taxpayer’s annual turnover of his business exceeds Rs 2 crores then he will have to file ITR 3.

 

Who can file ITR-4?

You are required to file ITR 4 form in case:


  • You are a professional as mentioned u/s 44AA, and your gross receipts are less than or equal to Rs 50 lakh, in such case you can opt for the scheme under Section 44ADA.
  • You are running a small business and earning income from such business where your gross receipts are not more than Rs 2 crore, you can opt this scheme under Section 44AD.
  • You are involved in a goods transportation business and owns less or equal to 10 goods carriages along with having opted for presumptive taxation scheme under Section 44AE.
  • If you have salary/pension income
  • If you have one house property income
  • If you have other sources income (exclusive of income from winning a lottery and race horses).

What is the Structure of ITR 4 Form?


ITR-4 Form (SUGAM) is divided into various parts:

  • Part A: General Information
  • Part B: Gross total income
  • Part C: Deduction u/s 80 and taxable total income
  • Part D: Tax computation and tax status
  • Verification & signatures on the return
  • Schedule BP –Income from Business or Profession details

*(From AY 2018-19, The new ITR forms make it mandatory for small businesses and those paying tax under the government's presumptive taxation scheme to report their goods and services tax identification number (GSTIN) and turnover reported under the new tax regime)

  • Schedule AL: Asset & liability at the year end (applicable in case where income exceeds Rs 50 lakhs)
  • Schedule IT: Details of payment of advance-tax and self-assessment tax.
  • Schedule-TCS: Tax collected at source statement.
  • Schedule TDS1: Tax deducted at source on salary statement.
  • Schedule TDS2: Statement of tax deducted at source on income other than salary.
  • Supplementary schedule TDS1
  • Supplementary schedule TDS2
  • Supplementary schedule IT
  • Supplementary schedule TCS

 

Some of the significant changes made in the ITR 4 for the AY 2018-19 are:

 

1. From AY 2018-19 it mandatory for small businesses and those paying tax under the government's presumptive taxation scheme to report their goods and services tax identification number (GSTIN) and turnover reported under the new tax regime.

2. Further, some other fields have been added where now an assessee has to declare the following additional information.

 

i. Partners/ Members Capital

ii. Secured Loan

iii Unsecured Loan

iv. Advances

v. Fixed Assets

 

You can see the changes in the image below:

 

What is Presumptive Taxation Scheme? Who is eligible to take the benefit of the scheme?

 

Income Tax Law makes a mandatory requirement for businesses and professionals to maintain books of accounts as per Section 44AA under certain circumstances. To provide relief to small taxpayers from this tedious job, the Income-tax Act has framed the presumptive taxation scheme under sections 44AD, sections 44ADA and sections 44AE.

A person opting presumptive taxation scheme will get a relaxation from tedious job of maintenance of books of account and an declare income at a prescribed rate. (Hyperlinks).

 

There are three presumptive taxation schemes as given below:

 

1. Section 44AD: For Computing Profits & Gains of Business on Presumptive Basis (Turnover < Rs.2 crore)

2. Section 44AE: For Computing Profits & Gains of Business of Plying, Hiring or Leasing Goods Carriages –For Transporters (Owns goods vehicle <10)

3. Section 44ADA: For computing Profits and Gains of Profession on presumptive basis (Services < Rs.50 Lakhs) - (Hyperlink Guide on Presumptive Income)