Guide to ITR-4S (SUGAM)

The Income-tax department has introduced a separate Form for taxpayers running a business under the presumptive scheme. This form is referred to as "ITR- 4S (SUGAM)".

Presumptive taxation scheme is easy to understand and free from complexities. On a similar ground, the IT department has also come up with a form that is Easily Understandable (Sugam in Hindi) ITR-4S.

Who can file ITR-4S?

ITR-4S is applicable only to Individual/ HUFs/ Partnership firms having the following sources of income-

1. Business income as per presumptive taxation scheme U/s. 44AD and/or 44AE/44ADA of the Income-tax Act.
2. Income from salary,
3. Income from only 1 house property (except where loss is brought forward from previous years),
4. Income from other sources like interest from savings A/c., interest from fixed deposits, etc. (except casual incomes like the lottery, card games, income from racehorse etc.)

Who cannot file ITR-4S:-

A. This Return Form should not be used by a person who –

(a) is a Director in a company;
(b) has held any unlisted equity shares at any time during the previous year;
(c) has any asset (including financial interest in any entity) located outside India;
(d) has signing authority in any account located outside India; or
(e) has income from any source outside India.
(f) has deferred tax on ESOP received from employer being an eligible start‐up.

B. This return form also cannot be used by a person who has any income of the
following nature during the previous year:‐

(a) Profits and gains from business and professions which is not required to be computed u/s 44AD, 44ADA or 44AE, such as income from a speculative business, agency business, commission or brokerage Income etc.;
(b) Capital gains;
(c) Income from more than one house property;
(d) Income under the head other sources which is of following nature:‐
(i) winnings from lottery;
(ii) activity of owning and maintaining race horses;
(iii) income taxable at special rates under section 115BBE;
(e) Income to be apportioned in accordance with provisions of section 5A; or
(f) Agricultural income in excess of ₹5,000.

C. Further, this return form also cannot be used by a person who has any claims of loss/deductions/relief/tax credit etc. of the following nature:‐

(a) any brought forward loss or loss to be carried forward under any head of income;
(b) loss under the head ‘Income from other sources;
(c) any claim of relief under section 90, 90A or section 91;
(d) any claim of deduction under section 57, other than a deduction under clause (iia)
thereof (relating to family pension); or
(e) any claim of credit of tax deducted at source in the hands of any other person.

Contents of ITR-4S (SUGAM)

ITR-4S form is divided into various sections as follows. You need to fill these sections as per your applicability.

Personal details:-

You need to provide personal details like PAN (Permanent Account Number), name, address, gender, Date of birth, contact details, etc.

Gross Total Income:-

The aggregate of all incomes like salary, house property and other sources is treated as "Gross Total Income". Details related to incomes are required to be filled in the respective income schedule.

Deductions and Taxable Total Income:-

Tax saving deductions are given under various sections of the Income-tax Act.

Some of the frequently used tax-saving deductions are as follows-

1. Sec. 80C- Life insurance, PPF, PF, NSC, tuition fees, specified mutual funds, etc.
2. Sec. 80CCC & CCD- Investment in pension funds and schemes of Central Government.
3. Sec. 80D- Health insurance & preventive medical check-up.
4. Sec. 80E- Interest payment of higher education loan.
5. Sec. 80G- Donations made to various funds and charitable institutions.
6. Sec. 80TTA- Savings bank & post office A/c. interest.
7. Tax computation and tax status:-

Here, you are required to compute tax liability and claim taxes paid by you viz. TDS, advance tax, self-assessment tax, etc.

Tax status is referred to as Nil tax, tax payable or tax refundable.

Verification:-

You need to sign the return with a description that the information furnished by you is correct.

Schedules:-

In the end, the taxpayer is required to fill-up the various schedules as follows-

1. Schedule BP: Following particulars are required to be provided-
2. Gross turnover or gross receipts i.e. sales during a financial year.
3. Presumptive income U/s. 44AD- This income should not be less than 8% of the sales mentioned above.
4. Presumptive income U/s. 44AE.
5. In the case of partnership firms, salary & remuneration are paid to partners.
6. You need to provide 4 figures as of 31st March of the financial year such as sundry debtors, sundry creditors, stock-in-trade and cash in hand.

No other complex financials are required to be provided like balance sheet or profit & loss A/c.

Schedule AL- This schedule is applicable if the total income of the taxpayer exceeds Rs. 50 lakhs during a financial year.

Here, the following details are required to be provided-

1. Immovable assets like land, buildings.
2. Movable assets like cash in hand, jewellery, vehicles, yacht, boats, aircraft, etc.
3. Liabilities (loans) in relation to the above assets.
4. Details of advance & self-assessment tax paid.
5. Details of TCS (tax collected at source) as per Form 27D issued by tax collectors.
6. Details TDS from salary as mentioned in Form 16 issued by the employer.
7. Details of TDS other than salary such as TDS on interest from Fixed deposits as per Form 16A issued by tax deductors.

Some important terms

You may come across some tax terms while filing your tax return that you should about-

1. 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.
2. Revised return- After filing your return if you notice any mistake or addition to the return, then you may file a revised return by making necessary corrections. Original return will be replaced by Revised return.
3. Defective return- If you file a return containing any defect, then the return will be treated as defective. IT department will issue a notice to correct the defect within the time specified in the notice.
4. Notice number- If you are filing a return in response to any notice, you need to mention the notice number mentioned in the notice.
5. Advance tax- Tax paid in advance i.e. before the end of the financial year is referred to as Advance tax. Advance tax is required to be paid in quarterly instalments if total tax liability exceeds Rs. 10,000/-.
6. 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 the taxpayer himself hence it is referred to as Self-assessment tax.
7. TCS (tax collection at source)- At the time of sale of some specific goods, tax is collected by the 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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