Income Tax Return - Form ITR-4 (Sugam)
Simplified Presumptive Taxation Scheme for Small Businesses and Professionals
ITR-4 Overview
ITR-4 is the simplified return form for Individuals, Hindu Undivided Families (HUFs), and Firms (other than LLP) who are Residents and whose total income is up to Rs. 2 crores. It is mandatory for those opting for the Presumptive Income Scheme.
Crucial Exclusion: Not for an individual who is a Director in a company or has invested in Unlisted Equity Shares.
Eligibility: Income Sources for ITR-4
Must include income computed under Presumptive Sections:
- Section 44AD: Presumptive Income for Businesses.
- Section 44ADA: Presumptive Income for Professionals.
- Section 44AE: Presumptive Income for Tippers, Tractors, etc.(Goods Carriage).
Other Permitted Income Sources:
- Income from Salary or Pension.
- Income from One House Property (provided there is no loss to be carried forward).
- Income from Other Sources (including family pension, excluding income chargeable at special rates).
- Income of another person (spouse, minor child, etc.) if to be clubbed with the taxpayer's income.
Ineligibility: Who Cannot File ITR-4
- If taxpayer total income is more than Rs. 2 crores.
- If taxpayer has any brought forward losses from previous years.
- If taxpayer have foreign assets or have generated a foreign income.
- If the taxpayer has income from more than one house property.
- If the taxpayer is Director of a company.
- If taxpayer is an NRI or an RNOR.
- If there is Capital gains/losses on the sale of investment/property.
- If tax payer is assessable for the complete or part of the income on which TDS has been deducted in the hands of the person other than the assessee.
- Dividend income exceeding Rs. 10 lakhs taxable under Section 115BBDA. .Assesse has any unexplained income(i.e. cash credit, unexplained investment, etc.) taxable at 60% u/s 115BBE.
- Income under the head Income from Other Sources, for which the assessee has claimed exemption under Section 57.
- Deduction has been claimed u/s 80QQB or 80RRB in respect of royalty from patent or books.
- Deduction has been claimed u/s 10AA or Part-C of Chapter VI-A.
- If an individual is taxable in respect of an income but TDS for such income has been deducted by any other person(i.e., clubbing of income, Portuguese Civil Code, etc.).. 15.Assessee is Claiming relief of tax u/ s 90, 90A or 91.
Simple & Transparent Pricing for Income Tax Return 4
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Basic Plan
- Income tax return filing for a taxpayer with taxable income of less than Rs.10 Lakhs.
Standard Plan
- Income tax return filing for a taxpayer with taxable income of Rs.10 Lakhs to Rs 25 Lakhs.
Premium Plan
- Income tax return filing for a taxpayer with taxable income of more than Rs.25 Lakhs.
FAQ's on Income Tax Return - ITR 4
Your Questions Answered
Who is eligible to file ITR-4 (Sugam)?
ITR-4 is for Resident Individuals, HUFs, and Firms (other than LLPs) who opt for the Presumptive Taxation Scheme under Sections 44AD, 44ADA, or 44AE, and whose total income (including the presumptive income) does not exceed ₹50 lakh.
What is the Presumptive Taxation Scheme?
It is a simplified scheme where taxpayers declare their income at a statutory minimum percentage of their annual turnover or gross receipts. They are relieved from the burden of maintaining detailed books of accounts.
What is the minimum taxable percentage for Presumptive Income (Sec 44AD)?
For general businesses (Section 44AD), the minimum prescribed income is 6% of gross receipts received digitally/by bank transfer, and 8% for gross receipts received in cash.
What is the minimum taxable percentage for Professionals (Sec 44ADA)?
For specified professionals (e.g., Doctors, Engineers, Lawyers), the minimum prescribed income is 50% of the gross professional receipts. The total gross receipts must not exceed ₹50 lakh.
Who is NOT eligible to file ITR-4 (Sugam)?
You cannot file ITR-4 if you: have income exceeding ₹50 lakh; have income from more than one house property; have Capital Gains; are a director in a company; have held unlisted equity shares; or have foreign assets/income.
Do I need to maintain books of accounts if I file ITR-4?
No. A major benefit of ITR-4 under the Presumptive Scheme is that the taxpayer is exempted from maintaining detailed books of accounts under Section 44AA of the Income Tax Act.
Can I claim business expenses/deductions under ITR-4?
No. Since the taxable income is already computed as a percentage of receipts, the scheme allows no further deduction for general business expenses (like depreciation, rent, electricity, etc.) from the presumptive income.
What happens if my actual income is lower than the presumptive percentage?
If your actual net income is lower than the statutory minimum (e.g., less than 6%), you must not file ITR-4. You must file ITR-3 and get your books of accounts compulsorily audited under Section 44AB.
