ITR 4 Return Filing
ITR-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)
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
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.