ITR 4 Form for Income Tax Return Filing

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ITR 4 Form for Income Tax Filing

It is a crucial compliance requirement for the individuals as well as businesses in India to file Income Tax Return. Different ITR Forms have been categorized by the government for various taxpayers as per their income sources and structures. ITR 4 which is also known as “Sugam” is one among such form that has been primarily designed for individuals, HUFs i.e. Hindu Undivided Families, and firms that opt for the presumptive taxation scheme (PTS) as per sections 44AD, 44ADA, and 44AE of the Income tax Act, 1961. You should choose the correct ITR form wisely in order to comply with tax regulations and safeguard your financial interests.

What is ITR4?

ITR 4 which is also known as Sugam is one of the important Income Tax Return forms that has been designed by the Income Tax Department. This form will be applicable to taxpayers who derive income from presumptive taxation schemes. As per this scheme the income will be calculated at a fixed percentage of the total turnover or gross receipts and eliminate the need to maintain detailed books of accounts. This form has been specifically designed for small business owners, freelancers, professionals, transporters, and small firms except LLPs. If your income falls under the specified criteria it becomes compulsory for you to file ITR 4.

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Who is Eligible for filing ITR-4(Sugam)?

We will provide you with a general understanding of who is typically eligible to file ITR 4 form in India. The ITR 4 form in India is primarily meant for individuals, HUFs i.e. Hindu Undivided Families and firms (excluding LLPs) having income from business or profession and have opted for the presumptive taxation scheme. Here are the key eligibility criteria for filing ITR 4. It can be filed by the Individuals and HUFs who meet some of the specific criteria. The Presumptive Taxation Scheme Breakdown are as given below:

Section 44AD

Small businesses having a turnover up to Rs. 2 Crores can declare 6% (for digital declaration) and 8% (for cash transactions) as their net income.

Section 44ADA

Professionals including doctors, engineers, lawyers, consultants, etc. who earn up to Rs. 50 Lakhs annually can declare 50% of their gross receipts as income.

Section 44AE

Transporters who own up to 10 vehicles can declare income at a prescribed rate per vehicle.

Who is Not Eligible to File ITR-4?

You are not eligible to file ITR-4, if, in case you

Individuals having income more than Rs. 50 Lakhs

Businesses or Professionals maintaining books of accounts

Companies and LLPs i.e. Limited Liability Partnerships

Taxpayers with Foreign assets or foreign income

Individuals who are directors in a company

Individuals who claim deductions under sections 10AA, 80HH to 80RRB

Income from capital gains including stocks, mutual funds, real estate sales, etc

Individuals who are liable to audit under the Income Tax Act

Non-resident individuals or HUFs i.e. Hindu Undivided Families

Income from speculative business or casual income including lottery winnings, gambling, racehorse income etc

Income Tax Return Due Date

The Income Tax Return last date for filing ITR 4 is typically the same as for other forms, providing protection from penalties for late filing.
Usually the last date of filing ITR 4 will be 31st July until there are any changes made by the government.

Essential Documents Required for Filing ITR-4

PAN Card
Aadhaar Card
Bank Account Details
Form 16 (in case of salaried individuals)
Form 26AS (Tax Credit Statement)
Profit & Loss Account (if applicable)
Balance Sheet (if applicable)
TDS Certificates (if applicable)
Receipts of Investments for Deductions including LIC, PPF, ELSS, etc

Penalties for Non-Filing of ITR-4

Failing to file your ITR on time or submitting incorrect information can result in substantial penalties, as outlined below:

1. Late Filing Penalty – Section 234F

If the ITR is filed after the due date but before 31st December, a penalty of ₹5,000 may be imposed.
If filed after 31st December, the penalty increases to ₹10,000.
However, for taxpayers with a total income below ₹5 lakhs, the maximum penalty is limited to ₹1,000.

2. Interest on Outstanding Tax

An interest of 1% per month may be levied on any unpaid tax amount under Sections 234A, 234B, and 234C for delays in payment.

3. Prosecution

In extreme cases, failure to file income tax returns can result in prosecution under the Income Tax Act, leading to legal proceedings and possible imprisonment.

Final Thoughts

ITR 4 is a simplified income tax return form applicable to individuals and Hindu Undivided Families (HUFs) who earn income from business or profession under the presumptive taxation scheme as per Sections 44AD, 44ADA, or 44AE of the Income Tax Act. Filing this form accurately ensures compliance with tax regulations, allows for lawful deductions, and helps avoid unnecessary penalties. Proper understanding of the eligibility criteria and filing process is essential to prevent errors. Timely and correct submission of ITR 4 not only reflects financial responsibility but also supports the broader goal of national development.

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