For filing returns, the Income Tax Department has set out different forms. These forms are filed by the taxpayers as per the category that they fall under and the source of their income. There are multiple criteria that decide eligibility of a taxpayer to file a particular ITR form. Form ITR-4 is used for filing Income Tax Return by those taxpayers who have opted for the presumptive income scheme under Sections 44AD, 44ADA and 44AE of the Income Tax Act, 1961. This is, however, subject to the business turnover limit of INR 2 crores, exceeding which the taxpayer would be required to file ITR-3. Presumptive Taxation scheme is a scheme that exempts the small taxpayers from maintenance of books of accounts.
Form ITR-4 is required to be filed by those individuals whose income comes from the following sources:
Form ITR-4 cannot be filed by any individual who:
Form ITR-5 may be filed by the taxpayer either offline or online.
Offline filing of the form may be done by:
Online filing of Form ITR-5 can be done by:
Presumptive Income and its Taxation
Small businesses usually do not have enough resources for maintaining proper accounts and calculating exact profit or loss. For this reason, the Income Tax Department has laid down simple provisions for computation of income tax of small business owners based on gross receipts of the business.
Form ITR-4 has the following parts:
All Inclusive Pricing - No Hidden Fee
all inclusive fees
Income tax return filing for a taxpayer with taxable income of less than Rs.10 lakhs.
all inclusive fees
Income tax return filing for a taxpayer with taxable income of less than Rs.25 lakhs.
all inclusive fees
Income tax return filing for a taxpayer with taxable income of more than Rs.25 lakhs.
ITR-4 SUGAM form can be filed under any of the following four methods:
Assessee filing ITR-4 SUGAM form under the fourth method must complete the acknowledgement in ITR-V. After preparing ITR-V, the assessee should print out two copies of Form ITR-V. One copy of ITR-V, duly signed by the assessee, has to be sent by ordinary post toPost Bag No. 1,
The other copy may be retained by the assessee for his record.
From the financial year 2016-17, businesses having a turnover of upto Rs.2 crores can be registered under the presumptive taxation scheme. The rates of presumed income chargeable to tax under the cheme is set at 8% for the financial year 2016-17. Hence, if a business has a total turnover of Rs.1.0 crores in 2016-17, then the income chargeable to tax would be Rs.8 lakhs. Further, though the minimum amount chargeable to tax is determined under the presumptive taxation scheme, there is no higher limit. Hence, a taxpayer can also willingly declare a higher income than the mandatory 8% of gross receipts or total turnover, while filing income tax returns. So, it is up to the discretion of the business owner to declare if the profit margin in the business is more than the mandatory 8%.
The presumptive taxation scheme has also been extended to professionals. However, professionals who wish to enroll under the presumptive taxation scheme should have gross receipts from professional services not exceeding Rs.50 lakhs in a financial year. For professionals enrolled under the presumptive taxation scheme, 50% of the total receipts of the professional during the financial year would be considered as profit and get taxed under the income tax head, “Profits and gains of business or profession”. For example, if a professional has total receipts from profession amounting to Rs.30 lakhs, then the taxable income would be a minimum of Rs.15 lakh under the presumptive taxation scheme.
Similar to the presumptive taxation scheme for SMEs, professionals can also declare income more than the mandatory 50% of the total receipts. Further, while calculating income under presumptive taxation scheme, professionals can claim deduction with respect to salary and interest paid to partners. However, professionals will not be eligible to claim deduction under Sections 30 to 38, including depreciation on assets.
The presumptive taxation scheme for transporters can be availed by persons involved in plying, hiring or leasing of goods carriages. Individuals who own less than 10 goods carriage can enrol under the presumptive taxation scheme for transporters. Taxpayers enrolled under the presumptive taxation scheme for transporters can calculate income to be 7,500 for every month (or part of a month) for all types of goods carriage vehicles, heavy or light.