ITR 4 Form Filing

The Income Tax Act of 1961's Sections 44D, 44DA, and 44AE require taxpayers who have chosen the Presumptive Taxation Scheme to complete Form ITR 4. However, this is contingent on the business's annual turnover cap, which is Rs. 2 crore. In that instance, the taxpayer must file Form ITR 3.

What is Presumptive Taxation in Scheme?

Presumptive Taxation Scheme is a scheme that exempts small taxpayers from maintaining the books of accounts.

Who is Eligible to file Form ITR 4?

Individuals whose income comes from the following sources have to file ITR 4 Form:

• Business Income under Section 44AD/Section 44AE.
• Income from a profession as per Section 44ADA.
• Income up to Rs. 50 lakh from Salary or Pension.
• Income up to Rs. 50 lakh from One house property (that does not include the brought forward loss o loss that is to be brought forward under this head)
• Income from other sources up to Rs.50 lakh (does not include winning from lottery or horse races)
• Form ITR 4 can also be filed by the freelancers if the income is not exceeding Rs.50 lakh.

Who is not eligible for ITR 4 Form?

The following individuals need to file ITR-4:

• Holds Directorship in a company
• Holds any unlisted equity shares at any time during the previous year
• Has assets/financial interest in an entity outside India
• Has signing authority in any account outside India
• Has income from a source located outside India
• Has profits from a business or profession which is not required to be computed under sections 44AD, 44ADA, or 44AE, like income from a speculative business, commission, brokerage, etc.
• Makes Capital Gains
• Has income from more than one house property
• Has income under the head "other sources" from winning the lottery, horse races, income taxable at special rates u/s 115BBDA or 115BBE
• Has income which is to be apportioned under the provisions of Section 5A
• Has agricultural income exceeding INR 5,000
• Has any brought forward loss or loss which is to be carried forward under any income head
• Has loss under “income from other sources”
• Has a claim of relief under Sections 90, 90A or 91
• Has any deduction claim under Section 57 (except deduction relating to family pension)
• Has claim of tax credit which has been deducted at source in the hands of another person
• Has joint ownership in house property (inserted in AY 20-21).

Components of ITR 4 Form

The structure of Form ITR-4 is as follows

• Part A: General Information
• Part B: Gross total income under the five heads of income
• Part C: Deductions and Total Taxable Income
• Schedule BP: Details of Income from Business
• Schedule 80G: Details of Donations entitled for deduction under Section 80G
• Schedule IT: Statement of payment of advance tax and tax on self-assessment
• Schedule- TCS: Statement about Tax Collected at source
• Schedule TDS1: Statement of Tax Deducted at Source on Salary
• Schedule TDS2: Statement of tax deducted at source on income apart from salary
• Verification Scheme

Presumptive Taxation Scheme

What are the features of the Presumptive Taxation Scheme?

• Under presumptive taxation scheme, there is no requirement to maintain the books of accounts
• The net income is estimated to be 8% of gross cash receipts. However, for payments received via digital mode, the net income is assumed to be 6% of such gross receipts.
• Deduction of any business expense against this income is not allowed.
• The business owner has to pay 100% Advance Tax by the 15th of March. There is no need to comply with quarterly installments of due dates of Advance tax (i.e. in June, Sep, Dec)

Presumptive Taxation Scheme

How to file ITR 4 Form?

ITR-4 can be submitted both online and offline as well.

Offline

The following individuals can file offline form:

1. Individuals at the age of 80 years or more
2. The individual's income is less than Rs.5 Lakh and he does not have to claim a refund in the income tax return

ITR 4 can be filed offline :

• By furnishing a return in a physical paper form
• By furnishing a bar-coded return (An acknowledgment will be issued at the time of submission of the physical paper return)

Online/Electronically

1. By furnishing the return digitally using the digital signature.
2. By transmitting the data electronically and then submitting the verification of the return made in Form ITR-V.

If the ITR-4 Form is under digital signature then an acknowledgment will be sent to the registered email id.

Major Amendments made to the ITR 4 Form in AY 2021 - 2022

The Changes that are incorporated in the ITR 3 Form are:

Comparing the ITR 4 Form to the changes made the previous year, there haven't been any significant adjustments.

A declaration allowing users to select between the previous and new tax regimes has been added to the ITR 4 Form for the AY 2021-2022. This declaration is listed under Part A General Information and asks, "Are you choosing the new tax regime under Section 115 BAC, where the tax payer must select "Yes" or "No"?" If the answer is yes, the furnishing date of the Form 101E and the acknowledgment number must be filed.

Part B - In the e-filing utility, select the type of income under "Income from other sources" from a drop-down menu that includes options for interest from savings accounts, deposits, etc. The quarterly breakdown must be provided in the case of dividend income in order to allow the appropriate relief from the charge of interest for failure to pay advance tax in accordance with section 234C.

For the AY 2020–2021, Schedule DI has been eliminated.