Everything you need to know about ITR-4 Form

The Indian Government specifies seven income tax returns categories for its citizens. Among these is the ITR-4. ITR-4 is filed by partnerships/HUF/individuals/business owners (manufacturers, wholesalers, online sellers, etc.) whose net income of 2021-22 is up to ₹50 lakhs subject to other conditions. You can check out the eligibility rules of who needs to file this return.

Also, through this article, we will give you detailed, step-by-step points on how you can file the ITR file online and offline. Let's get started on the important details of the ITR-4 form.

What is the ITR-4 form?

The ITR-4 Sugam is one of the income tax returns forms. It is for those taxpayers who have opted for a presumptive income scheme. This scheme has been outlined in Section 44AD, Section 44AE, and Section 44ADA. Note, however, that if the business's turnover exceeds ₹2 crores, the taxpayer needs to file ITR-3.

ITR-4 Structure

What is the structure of the ITR-4 form?

The ITR-4 form has been divided into several parts. Each part takes information regarding different aspects of an individual's tax declaration. Take a look at the ITR-4 structure!

PART A contains all the general information like name, DOB and address
PART B includes the gross income from five heads of pay such as salary, house property, income from other sources
PART C is for deductions and total taxable income
PART D is for tax status and tax computations
SCHEDULE BP has the details on income from business or profession
SCHEDULE IT contains particulars of advance tax and self-assessment tax payments
SCHEDULE TCS particulars of tax collected at source
SCHEDULE TDS-1 has details regarding tax deduction at source from the salary
SCHEDULE TDS-2 has the specifics of tax deducted at source on any income source except salary

Who is eligible to file the ITR-4 form?

Here is a list of who is eligible for ITR-4. If you fall under this category, you should declare your returns under the ITR-4 option.

The ITR-4 is filed by individuals or Hindu Undivided Families who are RNOR (resident other than not ordinarily resident) or a firm which is not a Limited Liability Partnership but is a resident and has an income not exceeding ₹50 lakhs for the year 2021-22. Also, their revenues fall under the following heads:

Income received from a business where it is calculated on a presumptive basis under Section 44AD with a gross turnover of up to ₹2 crores. Alternatively, under Section 44AE, which is concerning income from up to ten goods carriages.
Income received from a profession where this income is calculated on a presumptive basis under Section 44ADA with a gross receipt up to ₹50 lakhs.
Income from salary or pension
Income from one house property
Interest income from the family pension which is taxable under other sources.

Points to Note:

The presumptive income computed under Sections 44AD, 44AE, 44ADA are assumed to be calculated after consideration is given to every loss, allowance, depreciation, or deduction under Income Tax Act.
If the income of a spouse or minor child is to be clubbed with the income of an assessee, use this form if the clubbed income falls within the ₹50 lakhs bracket.

These were the ITR-4 eligibility rules.

Which persons are not eligible to file the ITR-4 form?

While it is necessary to understand who needs to file the ITR-4 form, there is also a category of persons who do not need to file this form. Who these people are for the annual year 2021-22 is listed below:

The ITR-4 returns do not have to be filed by a person who:

Has a signing authority in any account located outside of India
Has unlisted equity shares in the 2020-21 year
Income from any source that is outside of India
Is a director of a company
Has any financial asset located out of India

Also, according to Section B, a person cannot use these returns if they have income from any of the following categories acquired in the previous year:

Income, profits, or gains from businesses or professions that are not required to be computed under 44AD, 44ADA, 44AE of Income Tax Act, such as incomes from brokerage, commission, agency, or speculative business
Capital gains
Income from more than one house property
Income from winning in lottery
Income from owning or maintaining racehorses
Income taxable under special cases such as Sections 115BBDA or Section 115BBE
Income which is to be apportioned under Section 5A
Income from agriculture above ₹5,000

Further Section C specifies that a person cannot use this form if they have any claims of loss/deduction/relief/tax credit under the following categories:

Any loss that is brought or carried forward under any income head
Loss under income from other sources
Any relief claimed from Sections 90, 90A, or 91
Any deduction claim under Section 57
Any deduction claim of tax deducted at source in the hands of any other person

Persons who fall under these categories do not have to file tax returns under the ITR-4 category.

How to file the ITR-4 form?

There are two ways in which you can file the ITR-4 form. One is through the online method, and the other is through the offline mode. Let's find out how to file ITR-4.

Offline method of ITR-4 filing

You can file the ITR-4 form offline only in the following cases:

If you are a super senior citizen of 80 years or more
If your income is not more than ₹5 lakhs, and those who do not need to claim a refund in ITR

Here's the process of how you can file the ITR-4 form.

Provide the ITR-4 in physical paper
Provide the bar-coded return

The Income Tax Department will issue an acknowledgement once they have received the physical paper. That answers how to file ITR-4 offline.

Next, learn about the online process.

The online method of filing ITR-4

File the ITR-4 form electronically on the e-filing web portal www.incometaxindiaefiling.gov.in. You can verify the filings in any of the following ways:

Digitally signing the verification part
Using EVC or electronic verification code to authenticate
Using Aadhaar OTP
Filling up and sending a copy of the income tax return verification form, which is ITR-V, by post to the below address:

Centralized Processing Centre, Income Tax Department, Bengaluru— 560500, Karnataka.

This verification form ITR-V should reach the office within 120 days from filing the form. Also, CPC will confirm the receipt of ITR-V to you on the email you have used to register for e-filing.

That's how to file ITR-4 online!

What if you do not get your income tax return copy

There are a couple of major changes for filing the ITR-4 for the annual year 2021-22. They are as shown below:

Individual taxpayers that meet the below criteria should also fill up ITR-1:
Those making cash deposits above ₹1 crore with a bank
Incurring expenses above ₹2 lakhs on foreign travel
Expenditure of above ₹1 lakh on electricity

The taxpayer should indicate the amount of expense or deposit.

In part A, the "Govt" checkbox has been changed to "Central Govt" and "State Govt."
In the “Nature of Employment,” a checkbox "Not Applicable" has been introduced.
The returns filed under this section have been separated into two categories. They are "Normal Filing" and "Filed in Responses to Notices" categories.
Schedule VI-A which is there for tax deductions, has some changes. It has been amended to include deductions under 80EEA and 80EEB. There is a drop-down menu to enter details of donations under the Section 80G.
Details of the tax deduction for investment, payments, or expenditures have to be made between 1st April 2020 and 30th June 2020.
In SCHEDULE BP, gross turnover or receipts include revenues from any electronic mode before the date.

These were the changes in ITR-4 for the annual year 2021-22.

In conclusion, we have told you how to file ITR-4 and what ITR-4 means. Complete filing of your income tax returns today!

Frequently Asked Questions

All

Does a person providing professional service avail of a presumptive scheme?

Yes, any professional who is not earning more than ₹50 lakhs can file tax returns under ITR-4. Under 44ADA, it has been extended to cover independent professionals as well.

What do you mean by resident but not ordinarily resident?

RNOR means that the person has returned from living abroad after a long period. It means they are citizens of India but were residents outside India for a while before returning.

Which forms are supposed to be used in AY 2020-21?

CBDT has announced that you will need to use ITR-1 or ITR-4 for filing the tax returns. Failure to file returns results in a fine of ₹10,000.