WHO IS ELIGIBILITY TO FILE FORM ITR - 4

ITR 4 or Sugam is a type of Income Tax Return form applicable to individuals, HUFs, and Partnership Firms generating an income from a business or profession. If you want to choose presumptive taxation on your business income under Section 44AD, 44ADA and 44AE of the Income Tax Act, 1961, you have to file ITR 4 form.

Who is eligible to file ITR-4 ?

ITR-4 can be filed by a Resident Individual / HUF / Firm (other than LLP) who has-

• Income not exceeding ₹50 Lakh during the FY.
• Income from Business and Profession which is computed on a presumptive basis u/s 44AD, 44ADA or 44AE.
• Income from Salary/Pension, one House Property, Agricultural Income (up to ₹ 5000/-).
• Other sources which include (excluding winning from Lottery and Income from Race Horses).

• • Interest from Savings Account
  • Interest from Deposit (Bank / Post Office / Cooperative Society)
  • Interest from Income Tax Refund
  • Family Pension
  • Interest received on enhanced compensation
  • Any other Interest Income (e.g., Interest Income from unsecured loan)

Who is not eligible to file ITR-4 for AY 2023-24?

ITR-4 cannot be filed by an individual / HUF / Firm (Other than LLP) who:

• is a Resident Not Ordinarily Resident (RNOR), and non-Resident Indian.
• has total income exceeding ₹ 50 Lakh.
• has agricultural income in excess of ₹5,000/-.
• whose books of accounts should be audited under the Income Tax Act, 1961.
• is a Director in a Company.
• has income from more than one House Property.
• has income of the following nature: 
  • winnings from lottery
  • activity of owning and maintaining race horses
  • income taxable at special rates u/s115BBDA or Section 115BBE
• has held any unlisted equity shares at any time during the previous year.
• has deferred income tax on ESOP received from employer being an eligible start-up.
• is not covered under the eligibility conditions for ITR-4.

Structure of the ITR-4 Form

The ITR-4S form is structured into four parts for easy reporting of your Income and tax-related information-

Part A: General Information

This section includes your personal details such as name, gender, PAN number, date of birth, income tax ward, address, email address, and mobile number.

Part B: Gross Total Income from the 5 Heads of Income

In this part, you report your Income from various sources categorized into five heads: Income from business, Income from salary or pension, Income from house property, and Income from other sources. By adding all these incomes together, you calculate your gross total Income.

Part C: Deductions and Total Taxable Income

Here, you list the deductions allowed under various sections of the Income Tax Act, such as 80C, 80D, 80E, and others. These deductions are subtracted from your gross total Income to arrive at your total taxable Income.

Part D: Tax Computation and Tax Status

This section involves detailed calculations related to your tax liability. It includes factors like surcharge, relief under section 89, interest under section 234B and 234C, advance tax paid, TCS collected, refund, rebate under section 87A, cess on tax payable, and more. It computes your total tax payable, and if the total tax and interest exceed the taxes paid, it calculates the balance tax due.

For individuals reporting Income from business and opting for the presumptive income scheme under Section 44AD or 44AE, additional information needs to be provided:

• Schedule IT: Statement of advance tax and self-assessment tax payment.
• Schedule TCS: Statement of taxes collected at source (TCS).
• Schedule TDS1: Statement of tax deducted at source on salary.
• Schedules TDS2: Statement of tax deducted on Income other than salary.

Depending on your tax situation, you may also need to fill out supplementary schedules like TDS1, TDS2, IT, and TCS as required.

After completing all the necessary sections and schedules, you must verify and sign the return before submitting it. This ensures the accuracy and legitimacy of the information provided.