What is ITR-4 (Sugam)?
CBDT in its press release dated March 31, 2017 notified ITR Form 1 and ITR Form 4 for 2017-18. This form is for those resident individuals/ HUF/ partnership firms who have opted for presumptive income for their income from business and profession under section 44AD, 44AE, 44ADA under Income Tax Act.
The due date for filing the return is July 31, 2017. We have discussed everything about filing the ITR Form 4 Sugam in this guide.
Who is eligible to use ITR-4?
The following persons are eligible to use ITR-4 Sugam for FY 2016-17:
Who is not eligible to use ITR-4 for filing their return?
If the income of a person includes the following, such person shall not be eligible to use this form:
- Income from more than one house property
- Lottery or horse race income, dividend in excess of ₹10 Lakhs, unexplained/ unaccounted incomes under section 115BBE
- Capital gains (Short term/ long term)
- Agricultural income > ₹5,000/-
- Income from speculative business , agency business, commission or brokerage
- If such person is availing double taxation relief for income earned outside India
- Resident person having any income from source outside India or having asset located outside India or signing authority of any account located outside India
What is presumptive business income and how is it computed?
Under the Income-tax Act, certain forms of businesses are subject to presumptive income tax. Which means that the income of such person from such business would be assumed at a particular % for tax purposes. Now let us understand the various conditions and rates under the income tax act for presumptive income:
- Section 44AD
For persons carrying out business (other than persons earning income from commission/ brokerage, agency business and business of plying, hiring or leasing of goods carriage) having a total turnover in the financial year upto ₹ 2 crores.
The income shall be deemed to 8% of total turnover. It shall be 6% of receipts for those receipts which have been received in digital mode before the due date of filing return.
- Section 44ADA
For persons carrying out profession having gross receipts in the financial year which does not exceed ₹ 50 Lakhs.
The income shall be deemed to be 50% of the gross receipts.
- Section 44AE
For person who owns not more than ten goods carriage at any time during the financial year and who carries out the business of plying, hiring or leasing goods carriage.
The income shall be deemed to be ₹ 7,500/- for per month or part thereof for each goods carriage.
Presumptive income provisions are optional. If a person shows less income then such person would be required to get tax audit done and also maintain the accounts. For eg. If business receipts are ₹50 lakhs, then income shall be 6% i.e. ₹ 3 lakhs. If a person shows income less than 3 lakhs he shall maintain books of accounts and get tax audit done.
How to file ITR-4 Sugam?
ITR form is required to be filed electronically on the income tax website (www.incometaxindiaefiling.gov.in). The option to file the form in paper form is available to following two persons-
- Individual of the age 80 years or more
- Individual whose income doesn’t exceed ₹ 5 lakhs and who has not claimed any refund in the return.
What are the contents of ITR-4 Form?
- Part A- Personal information
- Part B- Gross Total Income
- Part C- Deductions and Total Income
- Part D- Tax computation and tax status
- Verification, Nature of business/ profession
- Schedule BP
- Schedule AL (Remember that it is applicable only when total income exceed ₹50 lakhs)
- Schedule IT- Details of advance tax and self assessment
- Schedule TCS, TDS
How to fill ITR-4 online?
Taxpayers can following the below steps to file their ITR-4 online, themself:
- Visit the homepage of income tax site (www.incometaxindiaefiling.gov.in)
- Login with your login details (PAN, password and date of birth)
- Go to E-file Option then “Prepare and Submit Online ITR”
- Select AY as 2017-18 and ITR-4 and then submit
- The ITR-4 form will be displayed on the screen. The detailed filing process is discussed in below.
How to fill ITR-4 Form? Part by part explanation
Part A-Personal Information
- Fill the PAN details like PAN number, name, date of birth. (in case of online filing these details will be auto filled)
- Fill Aadhaar Number. It is mandatory to fill the same.
- Fill mobile number, email address and communication address (PIN code is mandatory).
- Fill residential status- Resident or non-resident. Also mention whether you are individual, firm or HUF?
- Tick the relevant box if you belong to Govt, PSU or others
- Fill the status of return in the column- return filed, whether the return is filed before the due date of 31st June of after the due date, revised, filed in response to notices?
- Tick the relevant box if governed by Portuguese Civil Code. If yes then only your share of income will be mentioned in the schedules.
Part B-Gross Total Income
- In column B1, you should fill the amount from schedule BP, of the income from business and profession.
- In other columns of Part B, you have to mention other incomes like salary, house property and other income. (Loss from house property can’t be carried forward with this form)
Part C-Deductions and taxable total income
Let us have a look on major deductions available to Individuals/ HUF under Income Tax Act. If you have any other types of deductions, you can mention the same in this part of the form.
Deduction under section 80D is available for self, spouse and dependent children upto ₹ 25,000, additional ₹ 25,000/- is available for parents. In case of senior citizens the limit is ₹ 30,000/-. In case of very senior citizen (80 yrs and above) the deduction is available on actual medical expenses upto ₹ 30,000/- when no medical policy has been undertaken. ₹ 5000/- is available for preventive health checkup (like health tests) the deduction of which is included in the mentioned ₹ 25,000/30,000. Read our detailed guide on deduction for medical insurance.
Part D- Computation of tax payable
Some of the important things regarding computation of tax are as follows:
- Rebate of ₹ 5,000 or tax amount whichever is less is available to Individuals/ HUF only when total income doesn’t exceed ₹ 5 Lakhs.
- Surcharge will be levied on the amount of income tax as follows:
For Ind/HUF: 15% when income> 1 cr
For Firm: 12% when income > 1cr
- Education cess @ 2% and Secondary and higher education cess @ 1% is applicable on the amount of income tax plus surcharge
- Relief for arrears or advance salary received during year will be available.
- Credit of taxes paid (in the form of TDS/ advance tax) will be allowed.
Complete the verification by filling your details and mention the date and place.
Nature of business or profession
You have to select the correct category of nature of business/ profession from the drop down menu and give the name and description of business/ profession.
- Here you will have to mention your gross receipts from business/ profession under section 44AD, 44ADA, 44AE so as to reach at the amount of income as per the provisions explained above in this article.
- Also, some financial particulars will have to be filled as shown below in the figure:
- Mention the amount of exempt income.
- In the last column, you will have to provide details of all bank accounts held in India other than dormant accounts.
- This has to be filed only when the total income exceeds ₹ 50 lakhs.
- Details of movable as well as immovable property will have to be filled along with the amount of their cost. The details of only those movables have to be given which are shown below-
- In addition to above, any investment held in any firm/AOP will have to be disclosed in third column.
- At last, any amount of liability incurred for the above assets and investments will have to be mentioned.
Schedule IT- Details of advance tax and self-assessment tax paid
Enter the challan details of the advance tax and self-assessment tax paid. Ensure that no tax is payable when you submit and file the return otherwise it will be considered as a defective return.
Schedule TDS- Details of TDS
Note: If tax is deducted on any income which relates to next year, such portion of tax can be carried forward to the next year. In the column amount of TDS claimed this year exclude such part which relates to next year and it will be carried forward.
Here the amount of TCS collected on your behalf will be mentioned as per form 27D and credit will be available for the same.
How to verify the return?
- One can send the signed copy of ITR to CPC Bengaluru physically within 120 days of filing return.
- Verification can also be done online by following ways-
- Aadhaar OPT
- Net banking
- EVC code
- Digital signature
- Go to View Returns/ Forms- Click here to view returns pending for verification- e-verify
- The options mentioned above will be displayed above and return can be verified.