ITR 4 Sugam – Who can file | Who cannot file ITR 4 | How to file ITR 4?

ITR-4: Income Tax Return Form 4 is notified for Assessment Year 2020-21 relating to Financial Year 2019-20. Due Date for Filing ITR 4 Sugam Form for AY 2020-21 is on or before 30th November 2020.

Who can file ITR 4?

All resident individuals, HUFs and Firms (other than LLP) having total income upto Rs. 50 lakh from-

1. Income from business computed on presumptive basis under Section 44AD (i.e. Gross Turnover upto Rs. 2 crore) or Section 44AE (income from goods carriage upto ten vehicles); or
2. Income from Profession computed on presumptive basis under Section 44ADA (i.e. Gross receipt upto Rs. 50 lakh); or
3. Income from Salary/ Pension; or
4. Income from One House Property; or
5. Income from Other Sources.

Further, in case of clubbing of income this form can be used only if Income being clubbed falls into above mentioned categories.

10 new Changes in Income Tax Return Forms for A.Y. 2020-2021

Who cannot file ITR-4?

Following are not eligible to file the ITR-4 Form-

1. This Return Form should not be used by a person who–
   1. is a Director in a company;
   2. has held any unlisted equity shares at any time during the previous year;
   3. have any asset (including financial interest in any entity) located outside India;
   4. has signing authority in any account located outside India; or
   5. has income from any source outside India.
2. This return form also cannot be used by a person who has any income from-
   1. Business and professions which is not required to be computed u/s 44AD, 44ADA or 44AE, such as income from speculative business, agency business, commission or brokerage income etc.;
   2. Capital Gains;
   3. Income from more than one house property;
   4. Income under the head other sources which is of following nature:-
      1. Winnings from lottery;
      2. Activity of owning and maintaining race horses;
      3. Income taxable at special rates under section 115BBDA or section 115BBE;
      4. Income to be apportioned in accordance with provisions of section 5A;
      5. Agricultural income in excess of Rs. 5000.
3. Further, this return form cannot be used by a person who has any claims of loss/ deductions/ relief/tax credit etc of-
   1. Any brought forward loss or loss to be carried forward under any head of income;
   2. Loss under the head “Income from other sources”;
   3. Any claim of relief under section 90, 90A or section 91;
   4. Any claim of deduction under section 57, other than deduction under clause (iia) thereof (relating to family pension); or
   5. Any claim of credit of tax deducted at source (TDS) in the hands of any other person.

TDS and TCS Rates Chart – Examples of how to calculate TDS for FY 2020-21

How to file Sugam ITR 4?

Income Tax Return form can be filed online and offline.

Online mode

By furnishing the return electronically using digital signature or by filing the data electronically and then submitting the verification of the return in Form ITR-V. 

How to calculate TDS on salary in Income Tax

Offline mode

The ITR form can be filed offline only in any of the following case: 

a. Individual is of the age of 80 years or more.
b. The income of the individual is less than Rs. 5 lakhs and who do not have to claim a refund in the income tax return. 

The return can be filed offline by furnishing a return in a physical paper form or by furnishing a bar-coded return. The Income Tax Department will issue you an acknowledgement at the time of submission of your physical paper return.

FAQs on Income Tax Audit under section 44AB of Income Tax

What are the Steps to file ITR-4?

Part-A General Information

Basic information has to be provided such as Name, Address, Date of Birth, Mobile no, PAN, Aadhaar number, Nature of Employment, Status of Assessee i.e. Individual/ HUF/Firm (other than LLP), section under which return is filed, etc.

Further, it also requires details of representative assessee such as name, capacity, address and PAN if return has been filed by such person. Also, new check points have been inserted i.e. 

1. Details of Electricity bills of over Rs. 1 lakh in a year
2. Deposit of Rs. 1 crore in bank account
3. Expense of Rs. 2 lakh on foreign travel, etc.

Penalty for not showing the income in Income Tax Return

Part-B Gross Total Income

This part of Return requires accumulating all the income under various heads i.e. Salary, House Property, Income from other Source and Income from PGBP. However, following changes have been made in AY 2020-21 year in ITR-4:

• A taxpayer who has a brought forward/carry forward loss from ‘Income from house property’ cannot use ITR-4 for FY 2019-20 onwards.
• In case the house property is rented out, the taxpayer will provide the name and PAN or Aadhaar of the tenant.
• A separate column introduced under ‘Income from other sources’ for deduction u/s 57(iv) – in case of interest received on compensation or enhanced compensation.

Difference between Section 44AD, 44ADA and 44AE

Part-C Deduction and Total Income

It requires Details of Investment made for tax saving from 1^st March 2020 to 30^th June 2020. Here, we provide deductions in respect of Chapter VI which includes section 80C, 80D, 80G, etc.

Part-D Tax Computations and Tax Status

Here, tax is calculated on total Income and effects are given for rebate u/s 87A, Relief u/s 89, Cess @ 4%, Interest on Income Tax, Advance tax, Self-assessment tax, TDS/TCS, etc.

Further, details of Bank accounts are to be provided for claiming any refund. However, now we have option to choose more than one bank account to claim refund. Nevertheless, Income Tax Department Centralized Processing Centre (CPC) will decide the bank account for crediting refund.

The amount under PGBP head of Income in Part-B is detailed in Schedule BP where computations are made as follows-

1. Computation of Presumptive Business Income u/s 44AD
2. Presumptive Profession Income u/s 44ADA
3. Computation of Presumptive Goods Carriage Income u/s 44AE

Advance Tax liability : Calculation, Due dates, Interest

Some information regarding Turnover/ Gross Receipt reported in GST and other financial particulars of business such as Capital, Loans, Advances, Inventories, Debtors, Cash, etc. has to be provided.

At the end verification is made by signing the form and details of TRP i.e. Tax Return preparer is provided, if prepared by him.

For any questions, you may reach us at Discussion Forum

The author of the above article is CA Rahul Gaur.

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