Form ITR 4 is filed by the taxpayers who have opted for the Presumptive Taxation Scheme
under Section 44D, 44DA, 44AE of the Income Tax Act,1961. But this is subject to the
business turnover limit i.e in case if the turnover is exceeding Rs.2 crore then the
taxpayer is required to file ITR 3 Form.
NOTE:
Presumptive Taxation Scheme is a scheme that exempts small taxpayers from maintaining the
books of accounts.
Individuals whose income comes from the following sources have to file ITR 4 Form:
Business Income under Section 44AD/Section 44AE.
Income from a profession as per Section 44ADA.
Income up to Rs. 50 lakh from Salary or Pension.
Income up to Rs. 50 lakh from One house property (that does not include the brought forward loss o loss that is to be brought forward under this head)
Income from other sources up to Rs.50 lakh (does not include winning from lottery or horse races)
Form ITR 4 can also be filed by the freelancers if the income is not exceeding Rs.50 lakh.
What are the features of the Presumptive Taxation Scheme?
Under presumptive taxation scheme, there is no requirement to maintain the books of accounts
The net income is estimated to be 8% of gross cash receipts. However, for payments received via digital mode, the net income is assumed to be 6% of such gross receipts.
Deduction of any business expense against this income is not allowed.
The business owner has to pay 100% Advance Tax by the 15th of March. There is no need to comply with quarterly installments of due dates of Advance tax (i.e. in June, Sep, Dec)
ITR 4 Form can be filed either offline or online:
Offline: Individuals at the age of 80 years or more The individual's income is less than Rs.5 Lakh and he does not have to claim a refund in the income tax return
Online: By furnishing the return digitally using the digital signature.By transmitting the data electronically and then submitting the verification of the return made in Form ITR-V. If the ITR-4 Form is under digital signature then an acknowledgment will be sent to the registered email id.
1. Is the balance sheet mandatory for ITR 4 Filing?
In the case of ITR 4, it is not necessary to disclose the particulars of the balance sheet.
2. What is cash in hand for ITR 4?
It is not necessary to disclose the personal assets in ITR4. Only the assets that are held to conduct the business are to be shown in ITR 4. You can show Nil (Zero) value concerning sundry creditors, inventors, and Cash in Hand. There will be no error on the validation and the returns can be filed.
3. Is it possible to convert ITR 1 to ITR 4?
Yes, Form ITR 1 can be converted to ITR 4.
4. Is it possible to shift from ITR 3 to ITR 4?
Switching from ITR 3 to ITR 4 is not possible unless the sales are declared in 44AD. Also, if the individual gets income from two residential houses he needs to choose ITR3.
5. an Doctors file ITR 4?
Yes, doctors can file ITR 4 after opting for the presumptive scheme and still declare the profits higher than 50% of receipts. But if the receipts are under Rs.50 lakhs and the expenses are lower than 50% of the receipts then a significant amount is saved by opting for the scheme.
