ITR-4 form is specifically for Individual/HUFs having income from business/ profession who are not covered by ITR-4S (SUGAM).
ITR-4S is for taxpayers who opt for presumptive taxation scheme U/s. 44AD or 44AF of Income Tax Act. This scheme is optional.
Hence, taxpayers who don't wish to go for presumptive taxation scheme, can file ITR-4.
Who can file ITR-4:-
ITR-4 is applicable only to Individual/ HUFs/ Partnership firms having following sources of income-
- Business income where turnover exceeds Rs. 1 crore.
Also, presumptive taxation scheme requires a taxpayer to disclose 8% profits of his turnover. Hence, if he wish to disclose profits of less than 8%, then he is required to file ITR-4.
- Income from profession.
- Income from salary.
- Income from house property.
- Income from other sources.
- Income from capital gains from sale of shares, property etc.
Hence, freelancers are required to fill ITR-4.
Are you a freelancer?
Read our Freelancers guide.
If you want to refer format of ITR-4 in pdf format,
If you want to refer instructions for filing ITR-4 in pdf format,
Checklist of documents required to fill ITR-4
Following documents are required to fill-up ITR-4:-
- If you have salary income, you will need Form 16 issued by your employer to enter salary details.
- If you have earned interest on Fixed deposits or saving bank A/c. and TDS has been deducted on the same, you will need TDS certificates i.e. Form 16As issued by deductors to enter interest details.
- You will need Form 26AS to verify TDS on salary as well as TDS other than salary. Form 26AS could be downloaded from incometaxindiaefiling.gov.in.
- If you are living in rented premises, then you will need rent paid receipts for calculation of HRA (in case you forgot to submit the same to your employer within time).
- If you have any capital gain transaction in shares, you will need summary or Profit/loss statement of capital gain transactions of shares or securities during a year, if any for computation of capital gain.
- In case you have sold out any property, you will need sale & purchase deed or property for computation of capital gain.
- You will need your bank passbook, fixed deposit receipts (FDRs) to calculate amount of interest income.
- If you have received rent from your rented house property, then you will need rental receipts to calculate rental income.
- In case of business/profession, you will require books of accounts and records as a proof for calculating amount of profits of financial year.
Books of accounts includes cash book, journal, ledgers, Balance-sheet, Profit & Loss A/c., etc. Also bills, vouchers, invoices for purchases, expenses are required to be kept.
- In case you want to claim any loss incurred during current year, then you will need document exhibiting the loss.
- In case you wish to claim previous year's loss, you will need copy of ITR-V pertaining to previous year disclosing said loss.
- You will also need documents or proofs for claiming tax saving deductions U/s. 80C, 80D, 80G, 80GG such as life & health insurance receipts, donation receipts, rent receipts, receipts for tuition fees etc, if the same were not considered in your Form 16.
Remember, if audit is applicable to taxpayers, then due date for filing ITR-4 is 30th September, 2016 for F.Y. 2015-16.
Whereas in other cases, the due date for filing ITR-4 is 31st July, 2016 for F.Y. 2015-16.
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Contents of ITR-4 (Images from pdf ITR form are to be inserted as per each schedule)
ITR-4 form is divided into following sections. Taxpayer needs to fill the applicable sections.
- Personal details:-
Taxpayer need to provide personal details like PAN (Permanent Account Number), Name, Address, Gender, Date of birth, Contact details, etc.
- Nature of business:-
Taxpayer need to enter his nature of business/profession like name of business and description of activity.
- Part A- BS (Balance sheet as on 31st March of financial year):-
Taxpayer is required to provide a detailed balance sheet on the basis of books of accounts maintained by him.
In case, taxpayer has not kept any books of accounts, then he needs to provide 4 figures as on 31st March of financial year such as 1. Sundry debtors, 2. sundry creditors, 3. stock-in-trade and 4. cash balance in hand.
- Part A- P & L (Profit & Loss A/c. for financial year):-
Taxpayer is required to provide a detailed Profit & Loss A/c. on the basis of books of accounts maintained by him.
In case, taxpayer has not kept any books of accounts, then he needs to provide 4 figures for a financial year such as 1. Gross receipts i.e. Turnover, 2. Gross profit, 3. Expenses, 4. Net profit.
- Part A- OI (Other Information):-
Taxpayer is required to provide other information such as-
- Method of accounting,
- Method of closing stock valuation,
- Certain incomes not included in Profit & Loss A/c.
- Certain expenses which are not allowed as deduction from incomes in Profit & Loss A/c.
- Amount of duties payable to Government such as VAT, sales tax, excise duty at the year end.
- Part A- QD (Quantitative details):-
Taxpayer is required to provide details of following for raw material & finished products-
- Opening stock at year end,
- Purchases during year,
- Consumption during year,
- Sales for the year,
- Closing stock at year end, etc.
- Part B- TI (Computation of total income):-
Aggregate of all incomes like business income, salary, house property and other sources is treated as "Gross Total Income". Details related to incomes are required to be filled in respective income schedule. Thereafter total tax saving deductions are deducted from Gross Total Income to compute Total Income.
Taxpayer need to enter income and tax saving deduction details.
- Part B- TTI (Computation of tax):-
Here, tax liability will be computed as per incomes and taxpayer can claim taxes paid by him viz. TDS, advance tax, self assessment tax, etc.
Tax status is referred as Nil tax, tax payable or tax refundable.
Taxpayer needs to sign the return with description that information furnished by him is correct.
At the end, taxpayer is required to fill-up the schedules such as Salary details, house property details, other sources details, taxes paid details, tax saving deduction details, losses details, details of exempt incomes, incomes of specified person, etc.
ITR-2 comes up with 32 schedules.
Refer below to know what is to be filled in a particular schedule-
- Tax payments-
Taxpayer needs to provide details of
- advance & self-assessment tax paid by you pertaining to current financial year.
- Details TDS from salary as mentioned in Form 16 issued by employer.
- Details of TDS other than salary such as TDS on interest from Fixed deposits as per Form 16A issued by tax deductors.
- Details of TCS (tax collected at source) as per Form 27D issued by tax collectors.
- Schedule S- Taxpayer needs to provide details of salary, allowances, perquisites, etc. as per your Form 16.
- Schedule HP- Taxpayer needs to provide details in case of
- Self-occupied property: Provide details of property and interest paid on housing loan, if any.
- Let-out property: Provide details of property such as address, rent received during year, municipal taxes paid and interest paid on housing loan, if any.
- Deemed-let out property: Provide details of property such as address, notional rent of similar property in that area, municipal taxes paid and interest paid on housing loan, if any.
- Schedule BP- Taxpayer needs to provide details of net profit calculated on the basis of books of accounts maintained.
- Schedule DPM- Taxpayer needs to provide details of depreciation on Plant & Machinery as per the rates given in Income Tax Act.
- Schedule DOA- Taxpayer needs to provide details of depreciation on Other Assets (Other than Plant & Machinery) as per the rates given in Income Tax Act.
- Schedule DEP- Taxpayer needs to provide details of depreciation on all assets as per the rates given in Income Tax Act.
- Schedule DCG- If taxpayer sells any depreciable asset, then he needs to provide details of deemed capital gains on sale of such depreciable assets.
- Schedule ESR- If taxpayer spent any amount on scientific research, he is required to provide details of such expenses. These expenses includes contribution to any institution doing scientific research.
- Schedule CG-
- Shares & securities: Provide acquisition and sale details.
- Property: Provide acquisition and sale details. Also details of any improvement made to property. And details of purchase of any other other capital asset to claim exemption.
- Schedule OS- Provide details of other incomes received by you during financial year such as FDR interest, saving bank interest, gifts, dividend from co-operative banks, casual incomes such as lottery winnings, etc.
You can claim expenses too if you have incurred it to earn such income.
- Schedule CYLA- If you have incurred any loss during financial year, you need to provide details of such loss like house property loss or capital loss.
- Schedule BFLA- This schedule will show you the income remained after set-off of losses pertaining to previous year/s'.
All the figures are auto-generated. No manual entry is required in this schedule
- Schedule CFL- If you wish to carry forward any loss to next financial year, you need to enter details of such loss here.
- Schedule UD- If net profit of business/ profession is not sufficient to cover depreciation on assets, then such balance depreciation could be carried forward to next financial year.
He needs to provide details of such unabsorbed depreciation.
- Schedule ICDS-
ICDS stands for "Income Computation Disclosure Standards". These are new rules made by IT department where mercantile system is used in business/ professions.
Taxpayer is required to calculate and provide the monetary deviation in profits by using these rules.
- Schedule 10AA-
If taxpayer is running his business in Special Economic Zone (SEZ), then he will get additional deduction U/s. 10AA of Income Tax Act.
He is required to calculate deduction amount as per this section.
- Schedule 80G- If you have contributed to any charitable trust or fund, you need to enter details here. Enter name of trust, full address, PAN of trust and amount of donation.
This schedule is bifurcated into 3 sections as-
- 100% deduction without qualifying limit- If the donation is made to specified funds of Government like Prime Minister National Relief Fund, Swatch Bharat Fund etc., then enter details here.
- 50% deduction with qualifying limit- If the donation is made to any registered charitable trusts such as tirupati balaji trust, any registered trust working for poor people, etc.
iii. 100% deduction subject to qualifying limit- If the donation is made to some institutions of Government like Rajiv Gandhi memorial trust, Indira Gandhi memorial trust, etc., then enter details here.
- Schedule 80IA to 80IE-
If taxpayer is running some specified business given under various sections 80IA to 80IE of Income Tax Act, then he is required to calculate amount of deduction under these sections.
- Schedule VI-A- Details of tax saving deductions are to be entered here.
These deductions are given under various sections of Income Tax Act.
Some of the frequently used tax saving deductions are as follows-
- Sec. 80C- Life insurance, PPF, PF, NSC, tuition fees, specified mutual funds, etc.
- Sec. 80CCC & CCD- Investment in pension funds and schemes of Central Government.
iii. Sec. 80D- Health insurance & preventive medical check-up.
- Sec. 80E- Interest payment of higher education loan.
- Sec. 80G- Donation made to various funds and charitable institutions.
- Sec. 80TTA- Savings bank & post office A/c. interest.
- Schedule AMT (Alternate Minimum Tax)-
If adjusted total income of taxpayer is more than Rs. 20 lakhs for a year, then taxpayer shall have to pay at least 18.5% of tax on such adjusted total income.
Adjusted Total Income =
Total taxable Income
Add.- Deduction U/s. 10AA
Add.- Deduction U/s. 80IA to 80IE.
Taxpayer is required to compute such AMT payable by him.
- Schedule AMTC (Alternate Minimum Tax Credit)-
As per Income Tax Act, if taxpayer pays excess MAT as compared to tax at normal rates, then he can carry forward this MAT credit to next financial years.
Taxpayer is required to calculate and disclose such MAT credit here.
- Schedule SPI (Specified Person's Income)-
If income of your spouse, minor son/ daughter, etc. are included in your income, then you need to mention details here. These provisions are known as "Clubbing of income".
Click here to know more about Clubbing provisions.
- Schedule SI (Special rate Income)-
Generally incomes are taxed as per slab rates. However, some incomes given in Income Tax Act are taxable at special rate.
E.g. Short term capital gain on listed shares is taxed at 15% will be mentioned here.
- Schedule IF (Income from Firm)-
If taxpayer is a partner in any partnership firm, then he needs to provide following details-
- Name of Partnership firm,
- PAN of firm,
- Whether Income-tax audit is applicable to firm,
- Whether section 92E i.e. audit for transfer pricing audit is applicable to firm,
- Taxpayer's share of percentage and amount in profits of firm,
- Taxpayer's capital balance in firm on 31st March of financial year.
- Schedule EI- Enter incomes which are not taxable i.e. exempt.
Exempt incomes includes interest, dividend from listed companies, Agricultural income, etc.
- Schedule PTI- If you have invested in business trust or investment fund, income received from such trust or fund is to be entered here alongwith TDS, if any.
- Schedule FSI- If you have earned any income from foreign source, then you need to enter details of the same here.
Following details are required-
- Country name.
- Taxpayer Identification number of that country (similar to PAN in India).
- Income earned in that country like salary, capital gains, etc.
- Taxes paid or deducted, if any in that country to earn such income.
- Tax payable in India if foreign income is treated as Indian income.
- Amount of relief will be auto-calculated as lower of tax paid in foreign country and tax paid in India.
- Schedule TR- This schedule is auto-calculated on the basis of data entered in foreign income schedule. You just need to mention the section for claiming relief as Sec. 90/90A/91 of Income Tax Act.
- Schedule FA- If you are having any foreign asset or any foreign income, this schedule will be applicable to you.
However, in case of Non-residents, this schedule is optional.
This schedule will be applicable to you if you are having-
- Foreign bank A/c.- Enter details like country, Bank name, A/c. holder's name, ownership status, peak balance during F.Y., etc.
- Financial interest in foreign entity- Enter details like country, Entity name, nature of interest and investment amount, etc.
- Immovable property outside India- Enter details like country, date of purchase, ownership status, investment amount, income earned from property, etc.
- Any capital asset like shares, etc. outside India- Enter details like country, date of purchase, ownership status, investment amount, etc.
- Foreign A/c. for which you are having signing authority- Enter details like country, Name of institution, Name of A/c. holder, A/c. No., Peak balance during F.Y., etc.
- Foreign trust in which you are trustee- Enter details like country, Name of trust, names of other trustees, names and address of settlers, etc.
- Foreign source income (not covered above)- Enter details like country, source of such income, amount of income, etc.
- Schedule 5A- This schedule is for Portugese Civil Code. If you are governed under this code, then you need to mention PAN of your spouse. As per code, 50% of your income and TDS thereon will be apportioned in the return of your spouse.
- Schedule AL- This schedule is applicable if total income of taxpayer exceeds Rs. 50 lakhs during a financial year.
Here, following details are required to be provided-
- Immovable assets like land, building.
- Movable assets like cash in hand, jewellery, vehicles, yacht, boats, aircrafts, etc.
- Liabilities (loans) in relation to above assets.
Some important terms
You may come across some tax terms while filing your tax return that you should about-
- Income tax ward/ circle- Income tax ward/ circle is determined on the basis of PAN and jurisdiction. You may view your ward/ circle by clicking here.
- Revised return- After filing your return if you notice any mistake or addition to the return, then your may file a revised return by making necessary corrections. Original return will be replaced by Revised return.
- Defective return- If you file a return containing any defect, then return will be treated as defective. IT department will issue a notice to correct the defect within time specified in notice.
- Notice number- If you are filing a return in response to any notice, you need to mention the notice number mentioned in the notice.
- Advance tax- Tax paid in advance i.e. before the end of financial year are referred as Advance tax. Advance tax is required to be paid in quarterly instalments if total tax liability exceeds Rs. 10,000/-.
- Self-assessment tax- After filling all the income & deduction details in your return and considering all TDS and advance tax payments, if tax is payable, then the same shall be paid before filing of return. This tax is computed by taxpayer himself hence it is referred as Self-assessment tax.
- TCS (tax collection at source)- At the time of sale of some specific goods, tax is collected by purchase of goods. This tax is known as TCS (tax collection at source). You can claim this TCS in your return on the basis of Form 27D issued by purchase i.e. tax collector.
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