Introduction to ITR-4 for AY 2023-2024

Understanding tax obligations is crucial for taxpayers in India. This blog post offers a comprehensive guide on ITR-4 for the Assessment Year (AY) 2023-2024, detailing who should file it, its applicability, and the filing process.

Understanding ITR-4: Definition and Purpose(h1)

What is ITR-4?(h3)

ITR-4, known as the 'Sugam' form, is an Income Tax Return form used by individuals and HUFs (Hindu Undivided Families) who opt for the presumptive income scheme under Sections 44AD, 44ADA, or 44AE of the Income Tax Act.

• Simplified Process: Designed for small taxpayers, ITR-4 simplifies the tax filing process.
• Presumptive Income Scheme: It applies to certain businesses with income computed on a presumptive basis.

Purpose of ITR-4(h3)

ITR-4 is meant to facilitate easier tax compliance for small businesses and professionals, reducing the need for detailed bookkeeping.

Eligibility Criteria for Filing ITR-4(h2)

Not everyone is eligible to file ITR-4. Here’s who can:(h3)

• Residents who are individuals, HUFs, or partnership firms (other than LLPs).
• Those with income from business and profession opted for the presumptive income scheme.
• Total income up to ₹50 lakh.

Who Cannot File ITR-4?(h3)

• Individuals who are directors in a company.
• Individuals who have invested in unlisted equity shares.
• Those with foreign assets or income.
   

​When to Use ITR-4: Applicability for AY 2023-2024(h2)

ITR-4 is applicable under specific conditions. Here's when you should consider filing ITR-4:

• For Presumptive Income: If you have income from a business or profession under the presumptive income scheme as per Sections 44AD, 44ADA, or 44AE.
• Agricultural Income: If your agricultural income is less than ₹5,000.
• Other Income Sources: Income from salary/pension, one house property, other sources (interest, etc.) up to ₹50 lakh.
• Residency Status: Applicable for resident individuals, HUFs, and partnership firms (excluding LLPs).

Applicability of ITR-4
 

Key Components of ITR-4(h2)

Understanding the structure of ITR-4 helps in accurate and complete filing:

• Part A: General Information: Basic details like PAN, Aadhar, address, and status of residency.
• Part B: Gross Total Income: Details of income from various sources.
• Part C-D: Deductions and Taxable Total Income: Information on deductions availed under various sections.
• Part E: Other Information: Details of bank accounts, foreign assets, etc.
• Schedule BP, AL, 80G: Specific schedules for reporting business profit, assets and liabilities, and donations.
   

​How to File ITR-4 for AY 2023-2024(h2)

Filing ITR-4 can be done both online and offline. Here’s a brief on the online process:

• Prepare Documents: Gather all relevant income, deduction, and investment proofs.
• Access the e-Filing Portal: Visit the Income Tax Department's e-filing portal.
• Fill in the Form: Select ITR-4 under the relevant assessment year and fill in the required details.
• Verify and Submit: Double-check the information, pay any due tax, and submit the form. Post submission, e-verify using Aadhar OTP, EVC, or sending a signed ITR-V to CPC Bangalore.
   

​Practical Tips for Filing ITR-4 Successfully(h2)

Filing ITR-4 accurately is crucial to avoid any complications. Here are some practical tips:

• Accurate Information: Ensure all personal and income details are accurate and up-to-date.
• Presumptive Income Calculations: Correctly calculate your presumptive income as per the applicable sections.
• Deductions and Exemptions: Claim all eligible deductions and exemptions to reduce your tax liability.
• Advance Tax and TDS: Account for any advance tax paid and TDS deducted during the year.
   

​Common Mistakes to Avoid in ITR-4 Filing(h2)

Avoid these common pitfalls for a hassle-free ITR-4 filing experience:

• Ignoring Presumptive Income Rules: Not understanding or incorrectly applying the rules of Sections 44AD, 44ADA, and 44AE.
• Incorrect Bank Details: Providing wrong bank account details can delay refunds.
• Forgetting to e-Verify: ITR-4 submission is incomplete without e-verification. Ensure it's done within 120 days of filing.
• Overlooking Other Income: Failing to report income from other sources like interest can lead to discrepancies.
   

​Conclusion: Navigating ITR-4 Filing with Ease(h2)

Understanding ITR-4 and correctly filing it is crucial for eligible taxpayers. With the right approach and attention to detail, you can ensure compliance with the tax laws for AY 2023-2024.

For personalized advice or assistance, consider consulting a tax professional or chartered accountant.

FAQs on Filing ITR-4 for AY 2023-2024(h2)

Q1: Can I file ITR-4 if I have capital gains?(h3)

A: No, if you have income from capital gains, you cannot file ITR-4.

Q2: Is audit necessary for those filing ITR-4?(h3)

A: An audit is not required for individuals opting for the presumptive taxation scheme unless their income exceeds the specified limits.

Q3: Can I switch between ITR-3 and ITR-4 every year?(h3)

A: Yes, you can choose between ITR-3 and ITR-4 based on your income situation each year, but ensure compliance with the applicable rules.