ITR - 4

ITR - 4 Sugam under Presumptive Income Scheme

The Income Tax Department, Govt of India has divided the taxpayers of India into seven different categories. ITR-4 Sugam form is filed by Indian individual/ Partnership firms/Hindu undivided families/Business owners (Online sellers, wholesalers, manufacturers, etc.) whose net income is not more than Rs. 50lakh. Basically it is a Form for Individuals, HUFs and Firms (other than LLP) being a resident having total income up to Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE

Eligibility to file ITR - 4 Form

Eligibility to file ITR - 4 Form

ITR-4 Sugam form can be filled an Indian individual/HUFs/Firm (other than LLP) who has:

  • Income not more than Rs. 50lakh in the financial year
  • Income from profession or business
  • Income from salary or pension
  • Income from one house property, agricultural income (up to 5000/-)
  • Interest from savings account
  • Interest from bank deposit, post office, cooperative society
  • Interest from income tax refund
  • Family pension
  • Interest received on enhanced compensation

ITR – 4 is not applicable if the business’s turnover exceeds ₹2 crores, the taxpayer needs to file ITR-3.

Features of Presumptive Taxation Scheme

  • In Presumptive Taxation Scheme, maintaining the books of accounts is not required.
  • The net income of the taxpayer is estimated to be 8% of gross cash receipts. But for the payment received via digital mode, the net income is supposed to be 6% of such gross receipts.
  • Deduction of any business expense against the income is not allowed.
  • The owner of the business need to pay 100% Advance Tax by 15th of March. It is not necessary to comply with quarterly instalments of due dates of Advance Tax in June, September and December.

Documents required to file ITR - 4 Form

The following documents are required to file ITR-4 Sugam form:

  • Form 16
  • Form 26AS & AIS
  • Form 16A
  • Bank statements
  • Housing loan interest certificates
  • Receipts for donation made
  • Rental agreement
  • Rent receipts
  • Investment premium payment receipts like LIC, ULIP, etc.

Who are not eligible for ITR - 4 Form

The ITR-4 returns do not have to be filed by the following persons

  • Persons having signing authority in any account located outside of India.
  • Persons having unlisted equity shares investments in the Financial Year.
  • Having any income source outside of India
  • Director of a company
  • Persons having 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 like 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:

  • If any loss 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.



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