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    Income Tax Return Filing With ITR 4 (Sugam)

    It is a crucial compliance requirement for the individuals as well as businesses in India to file Income Tax Return. Different ITR Forms have been categorized by the government for various taxpayers as per their income sources and structures. ITR 4 which is also known as “Sugam” is one among such form that has been primarily designed for individuals, HUFs i.e. Hindu Undivided Families, and firms that opt for the presumptive taxation scheme (PTS) as per sections 44AD, 44ADA, and 44AE of the Income tax Act, 1961. You should choose the correct ITR form wisely in order to comply with tax regulations and safeguard your financial interests.

    Understand everything about ITR 4 properly with the help of top online income tax return filing portals like Click To Professionals.

    What is ITR 4 (Sugam) Form?

    ITR 4 which is also known as Sugam is one of the important Income Tax Return forms that has been designed by the Income Tax Department. This form will be applicable to taxpayers who derive income from presumptive taxation schemes. As per this scheme the income will be calculated at a fixed percentage of the total turnover or gross receipts and eliminate the need to maintain detailed books of accounts. This form has been specifically designed for small business owners, freelancers, professionals, transporters, and small firms except LLPs. If your income falls under the specified criteria it becomes compulsory for you to file ITR 4.
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    Benefits of Filing ITR 4

    It will be very beneficial for the Indian taxpayers to file Income Tax Return by using ITR 4. Here we are going to discuss the benefits of Income Tax Return Filing which are as given below:

    Compliance With Tax Laws

    Income Tax Return Filing will make sure that you meet legal obligations as well as to avoid penalties.

    Carry Forward Losses

    With the help of Income Tax Return Filing (ITR 4) you can carry forward losses in order to set off in subsequent years.

    Easy Approval of Loan and Visa Applications

    You can submit the receipts of ITR 4 as the proof of income for the facilitation of loan approvals and visa applications.

    Claim Income Tax Refunds

    If you file an Income Tax Return, you can claim refunds for excessive TDS or advance tax paid.

    Avoidance of Notices

    If you file Income Tax Return properly, you can minimize the chances of income tax notices.

    Transparency

    If you file the returns properly in detail, it will make sure about financial transparency and compliance.

    Compliance With Tax Laws

    Income Tax Return Filing will make sure that you meet legal obligations as well as to avoid penalties.

    Carry Forward Losses

    With the help of Income Tax Return Filing (ITR 4) you can carry forward losses in order to set off in subsequent years.

    Easy Approval of Loan and Visa Applications

    You can submit the receipts of ITR 4 as the proof of income for the facilitation of loan approvals and visa applications.

    Claim Income Tax Refunds

    If you file an Income Tax Return, you can claim refunds for excessive TDS or advance tax paid.

    Avoidance of Notices

    If you file Income Tax Return properly, you can minimize the chances of income tax notices.

    Transparency

    If you file the returns properly in detail, it will make sure about financial transparency and compliance.

    Who is Eligible to File ITR 4 (Sugam)?

    We will provide you with a general understanding of who is typically eligible to file ITR 4 form in India. The ITR 4 form in India is primarily meant for individuals, HUFs i.e. Hindu Undivided Families and firms (excluding LLPs) having income from business or profession and have opted for the presumptive taxation scheme. Here are the key eligibility criteria for filing ITR 4. It can be filed by the Individuals and HUFs who meet some of the specific criteria. The Presumptive Taxation Scheme Breakdown are as given below:

    Small businesses having a turnover up to Rs. 2 Crores can declare 6% (for digital declaration) and 8% (for cash transactions) as their net income.
    Professionals including doctors, engineers, lawyers, consultants, etc. who earn up to Rs. 50 Lakhs annually can declare 50% of their gross receipts as income.
    Transporters who own up to 10 vehicles can declare income at a prescribed rate per vehicle.

    Moreover, ITR 4 can also be used by taxpayers with income from following sources:

    • Individuals, HUFs i.e. Hindu Undivided Families, and Firms except LLPs i.e. Limited Liability Partnerships
    • Income from salary, pension, or other sources including interest income
    • Income from One House Property except such cases where losses are brought forward
    • Agricultural Income up to Rs. 5,000/-
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    Who is Not Eligible to File ITR 4 (Sugam)?

    ITR 4 is not applicable to all individuals or HUFs i.e. Hindu Undivided Families. The given individuals are not allow to file ITR 4, instead they need to choose some other forms:

    • Individuals having income more than Rs. 50 Lakhs
    • Businesses or Professionals maintaining books of accounts
    • Companies and LLPs i.e. Limited Liability Partnerships
    • Taxpayers with Foreign assets or foreign income
    • Individuals who are directors in a company
    • Individuals who claim deductions under sections 10AA, 80HH to 80RRB
    • Income from capital gains including stocks, mutual funds, real estate sales, etc
    • Individuals who are liable to audit under the Income Tax Act
    • Non-resident individuals or HUFs i.e. Hindu Undivided Families
    • Income from speculative business or casual income including lottery winnings, gambling, racehorse income etc

    Income Tax Return Due Date

    • The Income Tax Return last date for filing ITR 4 is typically the same as for other forms, providing protection from penalties for late filing.
    • Usually the last date of filing ITR 4 will be 31st July until there are any changes made by the government.

    Structure of Form ITR 4 (Sugam)

    The form ITR 4 which has been used to file Income Tax Return divides into different sections. In order to navigate the complexities of tax laws, you should have to understand the structure of form ITR 4 accurately. Here is the detailed structure of the form:
    • Part A: General Information
    This section consists of the basic details of the taxpayer including full name, PAN Number, Aadhaar Number, date of birth, contact information and bank account details.
    • Part B: Gross Total Income
    Under this section you have to enter and verify income from all the sources including salary, family pension, house property and other sources which are income from interests. Additionally, you have to give the details of any exempt income (if any).
    • Part C: Deductions and Total Taxable Income
    • In this section you have to mention about the numerous deductions applicable to you including deductions under section 80D, 80C, 80G, etc.
    • You also have to mention the total taxable income after deductions.
    • Part D: Tax Computation and Tax Status
    Under this section, you will find the computed tax liability on the basis of the information that has been provided by you in the previous sections. If the amount is negative then you can claim it as refund and if it is positive then you have to pay the tax.
    • Schedule BP (Business & Profession Income)
    This section of ITR 4 includes details of turnover or gross receipts. It also consists of presumed income as per sections 44AD, 44ADA, or 44AE.
    • Taxes Paid & Verification
    This section includes details of TDS i.e. Taxes Deducted at Source, advance tax and self-assessment tax paid. It also consists of verification and signature of the taxpayer.

    Income Tax Return Process

    The process of Income Tax Return includes a number of tricky steps. You should have to understand its process properly for which you can seek the professional guidance of expert ITR filing consultants. The major steps are as given below:

    Firstly, you have to visit the official website of e- filing of income tax return which is https://www.incometax.gov.in/iec/foportal/

    • After login, if you are a first time user you have to register yourself.
    • If you are the repeat user you have to log in to the website.
    • You have to enter your PAN as your user id and then click ‘Continue’.
    • You have to check the security message given in the tick box.
    • Then, you have to enter your password & click on the ‘Continue’ button.
    After logging in, you will see the e- file menu on the menu bar. When you click on the e – file menu then, you will get the option of ‘Income Tax Returns’ on clicking which you will see the option of ‘File Income Tax Return’ and you have to click on that option.
    You will be redirected to the page of Income Tax return where you have to select the ‘assessment year’ and the ‘mode of filing’ for which you wish to file the income tax return and then you have to click on ‘Continue’.
    After that, you have to select the status of filing ITR as Individual and click on ‘Continue’.
    After that, you have to select the ITR form and you have to choose the ITR 4 then you have to fill the following details:
    • Personal information: Your basic details including your full name, PAN, Aadhaar Number, contact details, bank account details.
    • Gross total income: You have to enter & verify your total income from all the sources along with the details of exempt income.
    • Total deductions: The information about the deductions that you need to be claimed under the different sections.
    • Tax paid: Reflects the tax paid by you from all the sources but not been limited to TDS, TCS, Advance Tax & Self – assessment
    • Total tax liability: This section reflects the total tax liability as per the information provided by you previously. If the amount is negative then it can be claimed as the refund and if the amount is positive then you have to pay the following amount as tax.

    You have to choose the reason for filing the ITR. You have to select the correct option that has been applicable to your situation:

    • Taxable income is more than the basic exemption limit
    • Meets specific criteria & compulsory requirement of filing the ITR
    • Others
    You need to add your bank details. If already submitted, then you have to make sure that it has been pre- validated. You have to review the correctness of pre- filled information that has appeared on the new page.
    Your screen will display the summary of the tax computation according to your given information and you will get to know if you have to pay any tax or you are eligible for a tax refund. Then, you have to enter the place of your residence to preview and submit your ITR.
    E- Verification of ITR is the most crucial step. Your Income Tax Return will be incomplete until you verify it. You have the option to e – verify the ITR via Aadhaar OTP, Net banking EVC i.e. Electronic Verification Code or by sending a physical copy of ITR to CPC Bengaluru.
    At last, you have to click on the ‘Submit’ button to submit your ITR. After submission you will get the acknowledgment from the Income Tax department at your given email id.

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    Key Points to Remember While Filing ITR 4

    You should take care of some of the key considerations while filing income tax return with the help of ITR 4 which are as given below:

    You should have to double-check all the details before submission in order to avoid errors and penalties.
    You have to make sure about declaration of all income including all the sources of income even if it gets exempted from tax.
    You have to maximize tax-saving instruments as per section 80C as well as other applicable sections.
    You should take care about the due dates if ITR Filing. Filing after the due date may attract penalties and interest on unpaid taxes.
    It will be better for you to keep a copy of its acknowledgment for the future reference.

    Essential Documents Required to File ITR 4 (Sugam)

    • PAN Card
    • Aadhaar Card
    • Bank Account Details
    • Form 16 (in case of salaried individuals)
    • Form 26AS (Tax Credit Statement)
    • Profit & Loss Account (if applicable)
    • Balance Sheet (if applicable)
    • TDS Certificates (if applicable)
    • Receipts of Investments for Deductions including LIC, PPF, ELSS, etc
    Section 8 Company Registration

    Common Mistakes to Avoid While Filing ITR 4

    Although the process of filing ITR 4 is very simple, still you have to take care of some mistakes that you should avoid while filing this form. Such common mistakes are as given below:

    Filing the Wrong Form

    You have to make sure that you should meet the eligibility criteria for ITR 4 before proceeding.

    Mismatch in Income Details

    It will be better to cross-verify the details in Form 16 and Form 26AS and bank statements with the information entered in ITR.

    Incorrect Personal Details

    You have to declare all your personal details including PAN, Aadhaar, and Bank account details.

    Skipping Deductions and Tax Credits

    You have to declare all eligible deductions to minimize the tax liability and must verify form 26AS in order to make sure about all TDS Credits are claimed.

    Missing the Deadline

    Just make sure that you don’t miss the deadline as late filing attracts penalties as per section 234F.

    Penalties for Non-Filing of ITR 4

    If you fail to file your ITR on time or provide incorrect information can lead to the hefty penalties which are as given below:

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    Late Filing Penalty u/s 234F

    • If you file the ITR after the deadline but before 31st December, a penalty of Rs. 5,000/- may be levied on the taxpayer
    • If you file your ITR after 31st December, the penalty will be of Rs. 10,000/-
    • For taxpayers having an income of below Rs. 5 lakhs, the maximum penalty will be Rs. 1,000/-

    Interest on Outstanding Tax

    • An interest of 1% per month may be charged on unpaid tax liabilities as per the section 234A, 234B, & 234C for delay in payments.

    Prosecution

    • In severe cases, if you fail to file Income Tax returns may lead to prosecution under the Income Tax Act.

    Final Words

    ITR 4 is a comprehensive tax return form that has been used by individuals as well as HUFs i.e. Hindu Undivided Families who earn income from business or profession that opt for the presumptive taxation scheme under section 44AD, 44ADA, and 44AE. If you file the form accurately you can make sure about compliance with tax laws along with maximizing deductions and minimizing penalties. It requires accurate reporting of income, deductions, and compliance with tax laws to file the form properly. You can avoid errors and hefty penalties by understanding the eligibility structure and filing process of ITR 4. If you understand properly and file ITR 4 timely, it will reflect responsible citizenship as well as contribute to the growth of the nation.

    In order to navigate the complications or doubts you can seek the professional guidance of expert Income Tax Return consultants like Click To Professional.

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    So, what are you waiting for? Contact us now and enjoy a secured financial future!