The Sugam ITR-4S Form is the Income Tax Return form for those taxpayers who have opted for the presumptive income scheme as per Section 44AD and Section 44AE of the Income Tax Act. However, if the turnover of the business mentioned above exceeds Rs 3 crores, the tax payer will have to file ITR-4.
ITR 4S
Form ITR-4S has been discontinued since the Assessment Year 2017-18. Instead, taxpayers can now utilize Form ITR-4, which is now interchangeable with ITR-4S. Individuals (residents), Hindu Undivided Families (HUFs), and firms (excluding LLPs) who opt for the presumptive business option and have a total income of Rs.50 lakhs or less are required to file ITR-4.
The Sugam or ITR 4S form is available for taxpayers who are individuals, HUF members, or business owners with a presumptive salary, pension, or business income in addition to income from a property as well as income from other sources for IT returns.
ITR 4s or Sugam is Income Tax Return form that is to be filed by individuals, Hindu Undivided Family and small business taxpayers who have presumptive business income, salary or pension, one house property and income from other sources. This form cannot be used if the taxpayer has more than one house property or who has a speculative income or who has more than Rs.5,000 in agricultural income. A person who has won from lotteries or races cannot use this form. A person who has capital gains or losses to be carried forward, he cannot use ITR 4s.
ITR 4S Form
Part A: General information: This includes your name, sex, PAN number, date of birth, income tax ward, address, email address, mobile number.
Part B: Gross total income from the 5 heads of income: The 5 heads are income from business, income from salary or pension, income from house property, income from other sources and finally you need to add all of that it gives you the gross total income.
Part C: Deduction and total taxable income: Deductions allowed are under section 80C, 80CCD(2), 80DD, 80EE, 80GGC, 80TTA, 80CCC, 80CCG, 80DDB, 80G, 80RRB, 80U, 80CCD(1), 80D, 80E, 80GG and 80QQB. You then need to add all the deduction and deduct it from your gross total income this will give you the total taxable income.
Part D: Tax computation and tax status: under this you need to include your surcharge, relief under section 89, total interest under section 234B, total advance tax paid, total TCS collected, refund, rebate under section 87A, cess on tax payable after rebate and on surcharge, balance tax after relief, total interest under section 234C, total self-assessment tax paid, total taxes paid, tax payable after rebate, total tax, surcharge and cess, total interest under section 234A, total tax and interest and total TDS claimed. Finally, the total payable if total tax and interest is greater than the total taxes paid.
After you have filled up all these details, you will have to verify and sign on the return.
If you have to include the details of income from business, then you need to fill up the following required information under computation of presumptive income under Section 44AD or 44AE.
The particulars include:
- Schedule IT: This is the statement of payment of advance tax and tax on self-assessment.
- Schedule TCS: This includes the statement of taxes collected at source.
- Schedule TDS1: This is the statement of tax deducted at source on salary.
- Schedules TDS2: This is the statement of tax deducted on income apart from that on salary.
- The taxpayer might also have to fill up particulars of supplementary schedule TDS1, TDS2, IT and TCS if required.
The taxpayer must include the PAN number details and name as and when required.
Who is Eligible to File ITR-4?
ITR-4 is to be filed by the individuals/HUF/Partnership firm who fulfill the following conditions:
- Is a Resident of India as per Income Tax Act
- Having Business or Professional Income
- Income from business income calculated under Section 44AD or 44AE
- Income from profession calculated under Section 44ADA
- Total income not exceeding Rs. 50 Lakhs
- Should not have any capital gains income except for sale of asset as per Section 44AD(1)
- Should not have income from more than one house property
Who is Not Required to File ITR-4 for AY 2025-26?
- An individual whose total income exceeds rupees 50 lakhs.
- An individual who is either a director in a company
- An individual who has invested in unlisted equity shares cannot use this form.
- An individual, HUF or partnership firm who is required to maintain the books of accounts under the Income-tax Act, 1961.
- Resident but not ordinarily residents (RNOR) and Non-residents
- Individuals who have earned income through the following means: Lottery, racehorses, legal gambling, etc.
- Individual who has more than one house property
- Taxable capital gains (short-term and long-term)
- Agricultural income exceeding Rs 5,000
- A resident that has assets (including financial interest in any entity) outside India or is a signing authority in any account located outside India
- Individuals claiming relief of foreign tax paid or double taxation relief under section 90/90A/91
- Gains from Virtual Digital Assets (Crypto currency)
- Individuals for whom the TDS has been deducted under Section 194N
FAQs
Major Changes in ITR-4 Form from AY 2024-25?
- The default tax regime has been changed to the new tax regime following amendments introduced by the Finance Act 2023 to Section 115BAC. For individuals, HUFs, AOPs, BOIs, and AJPs, the new tax regime now applies by default. Taxpayers who prefer the old tax regime must explicitly choose to opt out. An individual filing ITR 4 must submit Form 10-IEA to opt out of the new tax regime.
- ITR-4 form has been updated to include a column for disclosing the amount eligible for deduction under Section 80CCH. Section 80CCH, was introduced by the Finance Act 2023, allowing individuals enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 01-11-2022 to claim a tax deduction for the total amount deposited in the Agniveer Corpus Fund.
- The Finance Act 2023 has increased the turnover threshold limit for opting for the presumptive taxation scheme under Section 44AD from Rs. 2 crores to Rs. 3 crores, provided that receipts in cash do not exceed 5% of the total turnover or gross receipts for the previous year. Additionally, Section 44ADA was amended to raise the threshold limit of gross receipts from Rs. 50 lakhs to Rs. 75 lakhs, given that receipts in cash do not exceed 5% of the total gross receipts for the previous year. To reflect these changes, ITR-4 has been updated to include a new column for disclosing “receipts in cash” under Schedule BP. The definition of cash includes cheques or bank drafts that are not account payee.
Presumptive Income & its Taxation – under Section 44AD?
When you are running a small business, you may not have enough resources to maintain proper accounting information and calculate your profit or loss. This makes it difficult to keep track of your income from such a business and find out how much tax you need to pay. With this in mind, the Income Tax Department has laid out some simple provisions where your income is assumed based on the gross receipts of your business. This method is called the presumptive method, where tax is paid on an estimated basis.