ITR-4 Form (SUGAM Form): The ITR-4 Form, known as the Sugam form, is for taxpayers who choose the presumptive income scheme under Sections 44AD, 44ADA, or 44AE of the Income Tax Act. Eligible taxpayers must fill out and submit this form.
But if a business has an annual turnover exceeding Rs. 2 Crores, they should use ITR-3 instead. Sometimes, depending on the situation, ITR-5 might be needed. Accounts Profession provides expert help for filing ITR-4. Contact our experts today for a smooth and accurate filing process.
Who Should Use ITR-4 Form (SUGAM Form)?
The ITR-4 Form, often referred to as the SUGAM Form, is intended for specific taxpayers under the presumptive income scheme outlined in Sections 44AD, 44ADA, or 44AE of the Income Tax Act. It’s applicable to individuals, Hindu Undivided Families (HUFs), and certain firms, except for Limited Liability Partnerships (LLPs).
Explaining the Presumptive Taxation Scheme
The presumptive taxation scheme simplifies tax compliance for eligible individuals and businesses. Instead of maintaining detailed accounting records, taxpayers can estimate their income based on prescribed rates.
Eligibility Criteria for ITR-4
To qualify for using the ITR-4 SUGAM form, taxpayers must meet specific criteria for the assessment year:
Total Income:
The total income should not exceed Rs. 50 lakh.
Income Sources:
- Income from Salary or Pension
- Income from One House Property
- Interest income and/or Income from family pension taxable under Other Sources
- Income from business computed on a presumptive basis (Gross Turnover up to Rs. 2 crores)
- Income from business computed on a presumptive basis (Income from goods carriage up to ten vehicles)
- Income from a profession computed on a presumptive basis under Section 44ADA (Gross receipt up to Rs. 50 lakh)
Ineligibility for ITR-4
The following categories of taxpayers do not fall under the ITR-4 applicability criteria:
- Directors of a company
- Individuals who have held unlisted equity shares during the previous year
- Taxpayers with assets or financial interests outside India
- Individuals with income from sources outside India
- Individuals with specific types of income during the previous year:
- Profits and gains from business and professions not required to be computed under Section 44AD, 44ADA, or 44AE
- Income from more than one house property
- Capital gains
- Income derived from winning a lottery
- Engagement in the activity of owning and maintaining racehorses
- Income subject to taxation at special rates under Section 115BBDA or Section 115BBE
- Income requiring apportionment according to the provisions of Section 5A
- Agricultural Income exceeding Rs. 5,000
Structure of ITR-4 Form
The ITR-4 Form is divided into several parts for comprehensive reporting:
Part A: General Information
- Personal details such as name, PAN, date of birth, address, etc.
Part B: Gross Total Income from the 5 Heads of Income
- Reporting income from various sources categorized into five heads: Income from business, Salary or Pension, House Property, and Other Sources.
Part C: Deductions and Total Taxable Income
- Listing deductions allowed under various sections of the Income Tax Act to compute the total taxable income.
Part D: Tax Computation and Tax Status
- Detailed calculations related to tax liability, including surcharge, relief under section 89, interest, advance tax paid, TCS collected, refund, rebate, cess, etc.
Additional Information for Business Owners
- Schedules like IT, TCS, and TDS1, TDS2 are provided for business owners reporting income under the presumptive scheme.
Annexure-less Return Form
When using the SUGAM return form (ITR-4), taxpayers are not required to upload additional documents, including TDS certificates. Simply fill out the necessary sections, verify, and submit the return.
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- Timely Filing: We prioritize timely filing to help you avoid penalties and meet tax deadlines.
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Frequently Asked Questions (FAQ’s)
What is ITR-4 (Sugam) Form?
ITR-4 (Sugam) is an income tax return form designed for taxpayers who opt for the presumptive income scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act.
Who is Eligible for ITR-4 (Sugam) Form?
Individuals, Hindu Undivided Families (HUFs), and firms (excluding LLPs) utilizing the presumptive income scheme under Sections 44AD, 44ADA, or 44AE are eligible for ITR-4.
Understanding the Presumptive Taxation Scheme
The presumptive taxation scheme simplifies tax compliance for small taxpayers by allowing them to estimate their income at prescribed rates, reducing the need for extensive financial records.
Eligibility for Presumptive Scheme under Section 44AD
Resident individuals, Resident HUFs, and Resident Partnership Firms (excluding LLPs) engaged in specific businesses can utilize this scheme to estimate their income, subject to certain conditions.
Eligibility for Presumptive Scheme under Section 44ADA
Resident individuals in India, professionals in specified fields under Section 44AA(1), can estimate their professional income using this scheme, subject to specific conditions.
Eligibility for Presumptive Scheme under Section 44AE
Individuals, HUFs, firms, and other residents or non-residents engaged in the business of plying, leasing, or hiring goods carriages can estimate their income under this scheme, provided they own not more than ten goods carriages during the previous year.
Eligibility Criteria for ITR-4 (Sugam) Form
To use ITR-4 (Sugam), taxpayers must meet specific criteria:
Total income should not exceed Rs. 50 lakh.
Income must be derived from specified sources, such as salary, pension, one house property, interest income, presumptive business income (up to Rs. 2 crores), and professional income (up to Rs. 50 lakh).
Ineligible Income Types for ITR 4 Filing
ITR-4 cannot be used for income types like profits and gains from certain businesses, more than one house property, capital gains, lottery winnings, owning and maintaining racehorses, and certain other specified incomes.
Eligibility for Taxpayers with Losses
Taxpayers with certain types of losses, deductions, or tax credits specified in the Income Tax Act are not eligible to file ITR-4 (Sugam).
Structure of ITR-4 (Sugam) Form
ITR-4 (Sugam) consists of four parts:
Part A: General Information
Part B: Gross Total Income
Part C: Deductions and Total Taxable Income
Part D: Tax Computation and Tax Status
About the Author
Vijaykumar S. Pal(Content Writer)
As a Accountant, I’m deeply immersed in the intricacies of income tax, GST, and maintaining financial records. Numbers are my forte, and I excel in deciphering complex financial statements and tax regulations. However, there’s another side of me that revels in the realm of words rather than figures. Writing has always ignited a passion within me. Whether it’s simplifying intricate financial concepts for broader comprehension or weaving captivating narratives, I find joy in crafting articles and blog posts that demystify the intimidating world of finance for everyday individuals.Categories