Guidelines for filling ITR- 4 SUGAM for AY 2020-2021

Guidelines for filling ITR- 4 SUGAM for AY 2020-2021

The Central Board of Direct Taxes (CBDT) issued the Guidelines for filling ITR-4 to help the taxpayers for filing the particulars in Income-tax Return Form-4 for the Assessment Year 2020-2021 relating to the Financial Year 2019-2020. The Form ITR-4, also called SUGAM is a simplified return form to be used by a taxpayer, if he is eligible to declare profits and gains from business and profession on presumptive basis under section 44AD, 44ADA or 44AE of the Income Tax Act. The current article briefs the Guidelines for filling Income-tax Return Form-4 (SUGAM) for AY 2020-2021.

Know more about Form ITR 4 (SUGAM) for AY 2020-21

Eligibility Criteria to file SUGAM

The  ITR- 4 SUGAM form is to be used by an individual who is a resident other than not ordinarily resident or a Firm (other than LLP) which is a resident, whose total income for the assessment year 2019-2020 does not exceed Rs. 50 lakh and who has income under the following o:

  • Income from Salary or Income from Pension
  • Income from One House Property
  • Interest income and/or income from family pension taxable under Other Sources
  • Income from a business where such income is computed on a presumptive basis under Section 44AD (Gross Turnover upto Rs. 2 crores)
  • Income from a business where such income is computed on a presumptive basis under Section 44AE (income from goods carriage upto ten vehicles);
  • Income from a business where such income is computed on a presumptive basis under Section 44AE (income from goods carriage upto ten vehicles);

Income from Profession where such income is computed on a presumptive basis under Section 44ADA (Gross receipt Upto Rs. 50 lakh)

Notes:

The income computed on a presumptive basis under sections 44AD or 44AE or 44ADA will be presumed to have been computed after considering to every allowance, depreciation, loss, or deduction under the Income-tax Act. However, a person having loss after giving effect to the proviso to sub-section 3 of Section 44AE need to file ITR5

If the income of another person like spouse, minor child, etc. is to be clubbed with the income of the taxpayer, the SUGAM can be used only if the income being clubbed falls into the above income categories.

Non-Applicability of ITR- 4 SUGAM Form

This Return Form SUGAM is not applicable for the following taxpayers:

  • Director of the company
  • The person who has held unlisted equity shares at any time during the previous year;
  • A person who has an asset (including financial interest in any entity) located outside India
  • An individual who has signing authority in any account located outside our country
  • If a person has income from any source outside India

The SUGAM form cannot be used by a person who has any income of the following nature during the previous year:

  • Profits and gains from business and professions which is not required to be computed under section  44AD, 44ADA or 44AE of Income-tax act such as income from an agency business, speculative business, commission or brokerage income
  • Income from more than house property
  • Capital gains
  • Income from winning a lottery
  • The activity of owning and maintaining racehorses
  • Income taxable at special rates under the section 115BBDA or section 115BBE of Income Tax Act
  • Income to be apportioned following provisions of section 5A of Income Tax Act
  • Agricultural income above Rs.5000

This return form also not applicable for an individual who has any claims of loss, deductions, relief, and a tax credit of the following nature

  • Any brought forward loss or loss to be carried forward under the Income from house property
  • Loss under the Income from other sources
  • Any claim of relief under section 90, section 9A or section 91 of the Income Tax Act
  • Any claim of deduction under section 57, other than a deduction relating to family pension
  • Any claim of credit of tax deducted at source in the hands of any other person

Assessment Year for which this Return Form is applicable

The ITR- 4 SUGAM is applicable for the assessment year 2020-2021 only, that is, it relates to income earned during the Financial Year 2018-2019.

SUGAM form is not mandatory

As mentioned above,  Form ITR-4 (SUGAM) need to be filed by a taxpayer, if he is eligible to declare profits and gains from business and profession on presumptive basis under section 44AD, section 44ADA of section 44AE of Income Tax Act.

If the taxpayer keeps and maintains all books of accounts and other documents referred to section 44AA, and also gets his/her accounts audited and gets an audit report as per section 44AB, filling up the Form ITR-4 (SUGAM) is not mandatory and other regular return forms such as ITR-3 or ITR-5, need to be used and no need to file ITR-4.

Annexure-less Return Form

The taxpayer need not upload documents with this SUGAM return (including the TDS certificate). All documents enclosed with the Return Form will be detached and returned to the taxpayer.

Tax Computation Details

The tax Computation for filing the ITR- 4 SUGAM is tabulated here:

Tax computation for every individual other than the resident individual who is of the age of 60 years or more at any time during the financial year 2019-2020 is as follows:

Sl.No Income Tax Liability
1 Upto Rs.2,50,000 Nil
2 Between Rs.2,50,001 – Rs.5,00,000 5% of income in excess of Rs.2,50,000
3 Between Rs.5,00,001 – Rs.10,00,000 Rs.12,500 + 20% of income in excess of Rs.5,00,000
4 Above Rs.10,00,000 Rs.1,12,500 + 30% of income in excess of Rs.10,00,000

Note: It is applicable for Hindu Undivided Family (HUF)

Tax liability for a resident individual who is of the age of 60 years or more but less than 80 years at any time during the financial year 2019-2020 is as follows:

Sl.No Income Tax Liability
1 Upto   3,00,000 Nil
2 Between 3,00,001 – 5,00,000 5% of income in excess of 3,00,000
3 Between 5,00,001 – 10,00,000 Rs.10,000 + 20% of income in excess of 5,00,000
4 Above  10,00,000 Rs.1,10,000  +  30%    of    income   in    excess   of 10,00,000

In case of a resident individual who is of the age of 80 years or more at any time during the financial year 2019-20

Sl.No Income Tax Liability
1 Upto   5,00,000 Nil
2 Between 5,00,001 – 10,00,000 20% of income in excess of  5,00,000
3 Above  10,00,000 Rs.1,00,000+ 30% of    income   in    excess   of 10,00,000

For Firm

In case of a Firm, tax is to be calculated at a flat rate of 30% of taxable income

Procedure for filling ITR-4 SUGAM

The income tax return form-4 (SUGAM) can be filed with the Income-tax Department in any of the following ways:

e-Filing of ITR-4 SUGAM

The applicant can file the ITR- 4 SUGAM form electronically on the e-filing web portal of the Income-tax Department and verify in any one of the following manners:

  • Digitally signing the verification part
  • Authenticating by way of electronic verification code (EVC)
  • By forwarding duly signed paper Form ITR-V (Acknowledgment) by post to CPC at the following address
    • Centralized Processing Centre
    • Income Tax Department
    • Bengaluru— 560500
    • Karnataka

The applicant is required to furnish the following details in the income tax return form-4 (SUGAM):

  • General Information about the taxpayer
  • Gross Total Income
  • Deductions and Taxable Total Income
  • Tax Computation and Tax Status
  • Details of Income from Business or Profession
  • Details of donations entitled for deduction under section 80G
  • Deduction in respect of health insurance premia under section 80D

Note: The Form ITR-V should reach within 120 days from the date of e-filing the return

The confirmation of the receipt of ITR V (Income Tax Return Verification Form) at Centralized Processing Centre will be sent to the taxpayer through mail ID registered in the e-filing account

Offline Method for super senior citizens

The super senior citizens (i.e. an individual of the age of 80 years or more at any time during the previous year) can file an income tax return – 4 in paper form, at the designated offices of the Income-tax Department, along with duly signed Form ITR-V

Filling out the ITR V- Income Tax Return Verification Form

After filing the ITR form – 4, the taxpayer needs to print out the Form ITRV- Income Tax Return Verification Form. ITRV- Income Tax Return Verification Form duly signed by the taxpayer need to be sent by ordinary post or speed post to Central, Processing Centre, Income Tax Department, Bengaluru- 560500 (Karnataka).

Obligation to File Return

Every individual or HUF whose total income before allowing deductions under Chapter VI-A of the Income-tax Act exceeds the maximum amount which is not chargeable to income tax is obligated to furnish his return of income in form SUGAM.

The maximum amount which is not chargeable to income tax for Assessment Year 2020-2021 for different categories of individuals is as follows:

Sl.No Category Amount
1 An individual who is below the age of 60 years or a Hindu Undivided Family (HUF) Rs.2,50,000
2 An individual, being resident in India, who is of the age of 60 years or more at any time during the previous year 2019-2020 but below the age of 80 years

Rs

3,00,000

3 An individual, being resident in India, who is of the age of 80 years or more at any time during the previous year 2019-2020 Rs.5,00,000

The obligation for Firm to File Return

Every firm is required to furnish the return of income in this ITR Form, where profits or gains from business or profession are computed on presumptive basis under the section 44AD, section 44ADA of section 44AE of Income Tax Act.

If a person whose total income before allowing deductions under Chapter VI-A of the Income-tax Act or deduction for capital gains (section 54 to 54GB) or exempt long term capital gains (section 10(38)), does not exceed the maximum amount which is not chargeable to income-tax but fulfils one or more conditions mentioned below is obligated to furnish his return of income

  • Deposit of amount or aggregates of the amount exceeding Rs.1 crore in one or more current accounts
  • Incurred expenditure of an amount or aggregate of the amount exceeding 2 lakhs for travel to a foreign country for yourself or any other person
  • Incurred expenditure of amount or aggregate of the amount exceeding one lakh on the consumption of electricity

Please click on the official link Guidelines for filling ITR-4 SUGAM for AY 2020-2021 for reference.

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