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ITR 4 Return Filing

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ITR 3 Return Filing

TR-4 is meant for individuals, HUFs, and firms (excluding Limited Liability Partnerships) with presumptive income from business and profession. It is applicable on following eligible businessess which falls u/s:

  • Sec. 44AD of Income Tax Act, 1961
    • Applicable on any business other than commission or agency business/plying or hiring of goods carriages/professions covered u/s Sec. 44ADA of Income Tax Act, 1961.
    • Total turnover or gross receipts do not exceed Rs. 3 crores in case of Business
    • The presumptive profit percentage for Sec. 44AD (Business) shall be 6%/8% of sale/gross receipts
    • 6% in case of receipts throught banking channel/8% for other than banking channels
  • Sec. 44ADA of Income Tax Act, 1961
    • Applicable on notified professions like CA/CS/Doctors/Lawyers/Architecht/Chartered Engineer etc covered u/s Sec. 44ADA of Income Tax Act, 1961.
    • Total turnover or gross receipts do not exceed Rs. 75 Lakhs during the relevant FY
    • Presumptive profit percentage for Sec 44ADA(Professionals) shall be 50% of Gross receipts
  • Sec. 44AE of Income Tax Act, 1961
    • Applicable on businesses related to leasing goods carriages, plying, or hiring covered u/s Sec. 44AE of Income Tax Act, 1961.
    • Net taxable income shall be calculated at the monthly rate of Rs. 7500 per vehicle per month (for heavy vehicles with more than 12MT gross weight)
    • Net taxable income shall be calculated at the monthly rate of Rs. 1000 per vehicle per month (for other vehicles with less than 12MT gross weight)

Why taxpayer should go for ITR 4?

  • Simplified Compliance: Presumptive taxation reduces the need for complex bookkeeping and auditing, making tax compliance easier for small business owners and professionals.
  • Lower Tax Liability: The prescribed tax rates are often lower than actual profits, resulting in potential tax savings for eligible taxpayers.
  • Time and Cost Efficiency: By avoiding extensive financial record-keeping, individuals save time and reduce accounting costs.
  • No Books of Accounts: In case of presumtive taxation, taxpayer is not required to maintain books of accounts for their businessess.
  • Accessible for All: The simplicity of these provisions makes them accessible to a wider range of taxpayers, including those with limited financial expertise.
  • Documents Required
  • Sales or Service Invoice
  • Purchase Invoices
  • Saving or FD Interest Certificate
  • Bank Statement Current and Saving (both) of relevant FY
  • Tax Saving Proofs (LIP, Mediclaim, FD over 5 years receipts etc.)
  • Home Loan Interest Certificate
  • Details of any other income
  • Rental Receipts
  • Donation Receipts
  • Tution Fees Receipts
  • Capital Gain reports
  • List of Foreign Assets holding