Important Keyword: Income Heads, ITR Documents, ITR-4, Presumptive Tax.
Table of Contents
What is ITR-4 form?
The ITR-4 form is designed for taxpayers who have chosen the presumptive taxation scheme under Section 44AD, Section 44ADA, or Section 44AE of the Income Tax Act. This scheme is intended to simplify the tax filing process for small businesses and professionals by allowing them to declare income at a prescribed rate without maintaining detailed books of accounts.
However, if your business turnover exceeds INR 2 crores (or INR 50 lakh for professionals), you will need to file ITR 3 instead of ITR 4. This is because the presumptive taxation scheme is only applicable within these turnover limits. When your income surpasses these thresholds, more detailed reporting is required, which is accommodated by ITR 3.
To file your tax returns, you can download the appropriate income tax utility from the official income tax department website. This tool will help you in filling out and submitting your ITR form accurately.
Until FY 2018-19 (AY 2019-20), it wasn’t mandatory to file an Income Tax Return if your total income was below the basic exemption limit. However, with Budget 2019, a new provision was added to Section 139(1), making it compulsory to file an ITR if you engaged in certain high-value transactions, even if your total income is below the exemption threshold. These transactions include:
- Depositing more than INR 1 crore in a current account.
- Incurring foreign travel expenses exceeding INR 2 lakh.
- Spending over INR 1 lakh on electricity.
Who Can File ITR-4?
The ITR 4 form is suitable for Individuals, Hindu Undivided Families (HUFs), and Partnership firms (other than LLPs) whose total income includes:
- Income from a business eligible for the Presumptive Taxation Scheme.
- Professional or freelancing income eligible for the Presumptive Taxation Scheme.
- Income from salary or pension.
- Income from one house property (excluding cases with carry forward losses).
- Income from other sources (excluding lottery winnings and income from race horses).
Additionally, HUFs and non-LLP firms with total incomes up to INR 50 lakh can use this form.
Who Cannot File ITR-4?
The ITR-4 form is not applicable if you have:
- Income from more than one house property.
- Winnings from lotteries or race horses.
- Income from capital gains.
- Agricultural income exceeding INR 5000.
- Income from speculative business.
- Losses brought forward or carried forward from “Income from house property”.
- Income from foreign sources or any foreign assets.
Structure of ITR Form Number 4
| Part/ Schedule | Heading | Fields |
|---|---|---|
| PART A- GENERAL | Personal Information | Name, Address, Date of Birth, PAN, contact details, etc. |
| Filing Status | Employer Category, Tax status, Residential status, Return filed u/s, etc. | |
| PART B | Income And Deduction | Income from Business, Salary, Pension, House Property, Other Sources |
| PART C | Deduction under Chapter VI-A | Deductions under section 80C, 80D, 80E, 80G, 80TTA, etc. |
| PART D | Tax computation | Breaking up Tax computation, Interest, Cess, Rebate, etc. |
| Schedule NOB BP | Nature of Business, If more than one business, indicates the three main activities/ products | Nature of Business, Computation of Presumptive Income under 44AD, 44ADA and 44AE, Financial Particulars of Business |
| Schedule AL | Details of Assets and Liabilities | Details of an immovable asset, Details of a movable asset, Interest held in the asset of a firm or AOP, etc. |
| Schedule IT | Details of Advance Tax and Self-Assessment Tax Payments | BSR Code, Date of Deposit, Chalan Number, Tax Paid |
| Schedule TCS | Details of Tax Collected at sources | Tax collection Account Number, Name of Collector, Tax Collected, Amount Claimed |
| Tax Details | TDS1: Details of Tax Deducted at Source from SALARY | TAN of Employer, Employer Name, Ted Deducted, etc. |
| Tax Details | TDS2: Details of Tax Deducted at sources from Income other than Salary | TAN, Name of Deductor, Year of Deduction, Tax deducted, etc. |
To ensure a smooth filing process for ITR 4, gather the following essential documents based on your relevant incomes:
Essential Documents:
- PAN (Permanent Account Number)
- Bank Account Details
- TDS Certificates
- Counterfoils of Taxes Paid
- Details of Original Return (if filing a revised return)
- Details of Notice (if filing in response to a notice)
- Electricity Bill (if expenses exceed INR 1 lakh)
- Travel Expenses (if expenses exceed INR 2 lakh)
- Bank Deposits (if deposits are INR 1 crore or above)
Documents Based on Type of Income:
Salary Income:
- Form 16 or Salary Slips from your employer
- Pension Statement/Passbook
House/Property Income:
- Address of the property
- Co-owner details (if property is co-owned)
- Interest Certificate/Repayment Certificate from the bank (for house/property loan)
- Rent Agreement (for let-out property)
Business/Profession:
- Profit & Loss Statement
- Balance Sheet
- Supporting documents for expenses incurred
- Bank Account Statement/Passbook
- Cash Register
- Any other required documents to maintain business & professional books of accounts
Other Sources:
- Savings/Current Account Statements/Passbook
- Interest Certificates for Deposits/Bonds/NSC
- PPF Account Statement/Passbook
- Dividend Warrants/Counterfoils
- Rent Agreement (for let-out machinery)
- Details of any other income receipts
Documents for Tax Breaks:
- PPF Account Statement/Passbook
- Fixed Deposit Certificates/Statements
- Mutual Fund NAV Statements
- ELSS/ULIP/NSC Investment Details
- Life Insurance Premium Receipts
- Medical Insurance Premium Receipts
- Preventive Health Checkup Details
- Pension Fund/National Pension Scheme Statement
- House/Property Loan Interest Certificate/Repayment Statement
- Education Loan Interest Certificate/Repayment Statement
- Tuition Fees Receipts
- Donation Receipts
- Certificate from Specified Medical Authorities (in case of disability)
- Receipts/Proof of any other tax-saving investments/contributions
ITR-4 Form Breakdown:
The ITR-4 form consists of six sections:
- Personal Information
- Gross Total Income
- Disclosures
- Total Deductions
- Taxes Paid
- Total Tax Liability
How to File the ITR-4:
You can file your ITR 4 either physically or electronically. Since FY 2013-14, electronic filing is mandatory for taxpayers who:
- Have an income of more than INR 5 lakhs
- Own assets outside India, including financial interests in any entity, or have signing authority in any account outside India
- Claim relief under Section 90/90A/91, requiring Schedule FSI and Schedule TR to be completed
Physical Submission:
- Submit the ITR 4 in paper form or as a bar-coded return form duly filled.
- The income tax department will provide you with an acknowledgment and a stamped submission copy.
File ITR-4 Online using Income Tax Website
- Log in to the e-filing portal using your user ID & password.
- Click on e-file > Income Tax Returns > File Income Tax Return from the dashboard
- Select the appropriate assessment year
- Select the online mode of filing the ITR
- Select the applicable status and click on proceed
- Select the ITR 4 option from the list provided
- Read the instructions and click on the option to proceed
- Select the options that are applicable to your particular situation and click on proceed
- Review the prefilled data and click on proceed
- Enter your income and deduction details in the different section
- You will be shown a summary of your tax computation based on the details you provided. If there is tax liability payable based on the computation, you will receive the option to pay instantly or pay later
- After paying tax, click Preview Return. If there is no tax liability payable, or if there is a refund based on tax computation, you will be taken to the Preview and Submit Your Return page
- Once validated, on your Preview and Submit your Return page, click Proceed to Verification
- On the Complete your Verification page, select your preferred option and click Continue
ITR 4 for AY 2021-22
Major Changes in ITR 2 for AY 2021-22
- Old Tax Regime: This regime allows various deductions and exemptions (like HRA, 80C, 80D, etc.) but comes with higher tax rates.
- New Tax Regime: This regime offers lower tax rates but does not permit most deductions and exemptions. Taxpayers need to evaluate their financial situations to choose the most beneficial option.
Read More: Form 16: TDS Certificate issued by Employer
Web Stories: Form 16: TDS Certificate issued by Employer
Official Income Tax Return filing website: https://incometaxindia.gov.in/
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