Is the ITR-4 Form the Right Choice for Your Income Tax Return Filing?

Filing Income Tax Returns (ITR) is one of the utmost responsibilities placed on taxpayers in India. Among the various forms enumerated by the Income Tax Department, the ITR-4 form holds immense significance for an individual opting for the presumptive taxation scheme. Thus, knowing the ITR-4 will assist small business owners, professionals, and freelancers in filling their forms correctly.

This information by Services Plus tries to shed some light on everything you should know about the ITR-4 Form: its purpose, eligibility, instructions, tax computation, documentation, procedure of filing, and penalties for non-filing. Whether it is ITR 4 instructions you are looking for or filling out the ITR form online in India, this guide is all you need.

What is the ITR-4 form?

The ITR-4 form is a return filing form that is meant for:

• Individuals
• HUFs
• Partnership firms (not being LLPs)

Who earns income from:

• Business under Section 44AD
• Profession under Section 44ADA
• Transport business under Section 44AE

This would enable such taxpayers to file their income tax return on a presumptive tax basis without having to maintain books of accounts in detail.

Types of Income Reported in ITR-4 Form

The ITR-4 Form covers income for:

• Income from Business under Section 44AD or 44AE
• Income from Profession under Section 44ADA
• Salary/Pension Income
• Income from one house property
• Income from other sources (not including lottery winnings, racehorse income, etc.)

Eligibility to File ITR-4 Form

To file the ITR 4 instructions form, the taxpayer must satisfy the following criteria:

• Resident Indian.
• Income should not exceed ₹50 lakh.
• Income should come from presumptive business/profession (under Sections 44ADA, or 44AE).
• Can also include from salary, one house property and other sources (interest, etc.).

Who Cannot Submit ITR-4?

You cannot submit ITR-4 if:

• Your entire income exceeds ₹50 lakh.
• Always a foreign resident.
• You have multiple houses.
• You own foreign assets or have signing authority in any foreign accounts.
• You do business or have earnings from speculative activities or capital gains.

Presumptive Taxation as understood (Sections 44AD, 44ADA, 44AE)

• Section 44AD – Small businesses (turnover < ₹2 crore); income presumed at 8% of turnover (6% for digital receipts).
• Section 44ADA—For professionals like doctors, lawyers, architects, etc. (gross receipts < ₹50 lakh); income presumed at 50% of gross receipts.
• Section 44AE—For transporters, those having goods carriages, presumptive income is per vehicle per month.

Important points to consider for ITR 4 Instructions:

• All expenses incurred for a business cannot be claimed by filing under presumptive taxation.
• Filing is compulsory irrespective of tax liability (if his income exceeds basic exemption).
• Books of accounts do not require to be maintained.
• Digital signature for individuals and HUFs is not compulsory.

Documents Needed for ITR 4 Filing 

Here’s a list of documents that are typically required for filing the Income Tax Return filing form ITR form online in India:

• PAN Card
• Aadhaar Card
• Bank account details
• Form 26AS (Tax credit statement)
• TDS Certificates (Form 16/16A)
• Business turnover or receipts summary
• Investment details for claiming deductions (if any)

Process of Filing ITR 4 Form Online in India

Filing the ITR form online in India is really simple via authorized intermediaries, such as Services Plus, or via the Income Tax portal. 

Step-By-Step on Filing ITR-4:

• Go to the official Income Tax e-Filing Portal. 
• Login/Register using PAN and password. 
• Click e-File > Income Tax Returns > File Income Tax Return. 
• Choose the following:
• Assessment Year 
• Online mode 
• Individual/Firm/HUF as per requirement. 
• Select ITR-4 Form. 

Fill in all relevant particulars:

• Personal particulars Income particulars Deductions Tax payments 
• Validate all details. 
• Submit and e-verify via Aadhaar OTP, net banking, or DSC. 

Alternatively, you could take help from Services Plus for their complete assistance in filing your Income Tax Return filing form accurately and efficiently.

Tax Computation under ITR-4 

The income in ITR-4 Form is presumed to be the percentage of gross receipt or turnover:

• Business: 8% or 6% (digital receipts) 
• Professionals: 50% of gross receipts 
• Transporters: Fixed amount per vehicle per month 

The taxpayer pays income tax on presumptive income, and no deduction for further expense heads is allowed.

Penalties for Non-Filing or Late Filing of ITR-4 Form

Late or non-filing of the Income Tax Return filing form can attract penalties that are given below:

Advantages of Filing ITR-4 Form

• Simplified layout
• Lower degree of compliance (no books of account)
• Faster preparation and processing of returns
• Wide applicability among small taxpayers
• Encouragement of digital transactions at a 6% presumptive rate