Personal & Corporate Tax

  What is ITR -4 Form? This form is also known as SUGAM FORM.ITR-4 Form is an income tax return form for those taxpayers, who have opted for the presumptive income scheme as per Section 44AD, Section 44ADA and Section 44AE and whose income is not more than Rs 50 lakh. ELIGIBILITY TO FILE ITR-4: ITR 4 is to be filed by the individuals/HUF/ Partnership firm whose total income of AY 2020-21 includes as below: • Business income under section 44AD or 44AE • Income from profession calculated under section 44ADA • Salary/pension having income up to Rs 50 lakh • Income from One House Property having income up to Rs 50 lakh (excluding the brought forward loss or loss to be carried forward cases under this head) • Income from Other Sources having income up to Rs 50 lakh (Excluding winning from lottery and income from horse races). • Having agricultural income upto Rs 5,000/- • Total deposit in one or more current accounts exceeds Rs 1 crore • Total expenditure for travel to a foreign country for the taxpayer himself/ herself or any other person exceeds Rs. 2 lakhs • The Sum of expenditure on the consumption of electricity during the financial year exceeds Rs. 1 lakh. • Freelancers engaged in profession can also opt for ITR4 if their gross receipts don’t exceed Rs 50 lakhs. Note: Freelancers engaged in the above profession can also opt for this scheme if their gross receipts don’t exceed Rs 50 lakhs. IN-ELIGIBILITY TO FILE ITR-4: • The taxpayer has earned income under any of the following sources: 1. Capita Gains 2. Income from more than one house property 3. Agricultural income in excess of ₹5,000. • Income from other sources, namely: 1. winnings from lottery 2. Income or loss from owning and maintaining racehorses 3. Any income that is taxable at special rates under section 115BBDA or section 115BBE. • Any income to be apportioned in accordance with provisions of section 5A • Profit and income from business and/ or professions which is not required to be computed under section 44AD, section 44ADA, and section 44AE. Income such as speculative business, agency business, commission or brokerage income, etc cannot be computed under such sections. ITR 4 Form is not applicable to the taxpayer who: 1. is a Director in any company 2. Has income from any source outside India 3. holds a signing authority in an account that is located outside India 4. Holds an asset or a financial interest in an entity located outside India 5. Held any unlisted equity shares at any time during the previous year ITR 4 Form is not applicable to a taxpayer who has any claims of loss/ deductions/ relief/ tax credit etc. of the following types: 1. loss under the head ‘Income from other sources 2. The claim of relief under section 90, section 90A and/ or section 91 3. brought forward loss or carry forward loss under any head of income 4. TDS credit claim in the hands of any other person. 5. The claim of deduction under section 57 excluding deductions relating to relating to family pension ITR 4 Form is not mandatory to an assessee who: 1. maintains books of accounts as per section 44AA 2. Gets the books of accounts audited and obtains a tax audit report under section 44AB In such a case, the assessee must file other income tax forms like ITR 3 or ITR 5 as applicable. PENALTY PROVISION AS PER INCOME TAX ACT1961: As per section 234F of the Income Tax Act where a person is required to mandatorily furnish a return of income under section 139, fails to do so by the due date, attracts levy of late fee under this section to the amount of Rs 5,000/-, if the return is furnished on or before the 31st day of December of the assessment year; Rs 10,000/-, in any other case: In case the total income of the taxpayer does not exceed Rs 5,00,000/- then, the late fee payable shall not exceed Rs 1,000/- in any circumstances. Section 234F was made applicable in respect of Income Tax Return filed on or after the 1st April, 2018. MODE TO FILE INCOME TAX RETURN: OFF LINE MODE: Filing ITR in India is completely online and paperless. But I.T ACT 1961 provide option to file the return in paper form for following person: • An individual having age of 80 years or more at any time during the previous year. • The income of individual is less than Rs 5 lakhs and who do not have to claim a refund in the income tax return In offline mode, the return is furnished in a physical paper form. The Income Tax Department will issue an acknowledgement at the time of submission of your physical paper return. ON-LINE MODE: • In online mode, file return online and e-verifying the ITR V through net banking/Aadhaar OTP/EVC. • By feeding the data electronically and then submitting the physical copy of the return in the form of ITR-V to CPC, Bengaluru. NOTE- When Individual/Tax Payer furnish the ITR-1 return using electronic medium, the acknowledgement will be seen in the inbox of the registered email id. It can also be downloaded from the official income tax website manually. After downloading the acknowledgement, you need to sign the form and then send to the CPC office, Bangalore through registered/Speed post before completing 120 days counting from the e-filing date. On the other side, it is not required to send the ITR V to the CPC if EVC/OTP option is used. Annexure-Less Form: *Remember that ITR-4 is an annexure-less form i.e. you do not have to attach any documents when you send it. DUE DATE OF ITR FOR AY2020-2021: 1.ITR FILING: i. The due date for filing ITR by taxpayers (whose accounts not required to be audited) is extended from 31st July 21 to 30th Sep 21. ii. The ITR filing for Tax audit cases is extended to 30th Nov 2021 iii. The ITR filing for Transfer Pricing cases is extended to 31st December. iv. The due date to file a Belated or Revised Return is extended from 31st Dec 2021 to 31st Jan 2022. 2. Furnishing Audit Report: i. The due date to furnish the audit report under Income Tax Act is extended to 31st Oct 2021 ii. The due date of furnishing of audit report for transfer pricing cases is extended to 30th Nov 2021. UPDATE-Union Budget 2021: senior citizens have been exempted from ITR filing having aged 75 years and above, earning only pension and interest income. Changes In ITR 4 For Assessment Year AY 2020-21: 1. Individual taxpayers who meet the criteria of (a) making cash deposits above Rs 1 crore with a bank or (b) incurring expense above Rs 2 lakh on foreign travel or (c) expenditure above Rs 1 lakh on electricity should also file ITR-1. The taxpayer should indicate the amount of the deposit or expenditure. 2. Under Part A, ‘Govt’ checkbox stands changed to ‘Central Govt’ and ‘State Govt’, and a checkbox ‘Not applicable (e.g. family pension etc.) has been introduced under the ‘Nature of employment’ section. 3. Return filed under section has been segregated between normal filing and filed in response to notices. 4. The ‘Schedule VI-A’ for tax deductions is amended to include deduction under section 80EEA and section 80EEB. A drop down is provided to enter details of donations under section 80G 5. In ‘Schedule BP’, gross turnover or gross receipts to include revenues from prescribed electronic modes received before the specified date. 6. The details of tax deduction claims for investments or payments or expenditure made between 1 April 2020 until 30 June 2020. Structure of Form-ITR 4? The ITR 4 Sugam is divided into the following parts and schedules: Part A General Information Part B Gross Total Income Part C Deduction and Taxable Total Income Part D – Tax Computations and Tax Status Schedule BP – Details of Income from Business or Profession 1.Computation of Presumptive Business Income Under Section 44AD 2. Computation of Presumptive Business Income Under Section 44ADA 3. Computation of Presumptive Income from Goods Carriage Under Section 44AE 4.Information Regarding Turnover/ Gross Receipt Reported for GST 5. Financial Particulars of the Business i- Total Capital and Liabilities ii- Total Assets Schedule IT Details of Advance Tax and Self-Assessment Tax Payments Schedule TCS Details of Tax Collected at Source [As per Form 27D issued by the Collector(s)] Schedule TDS1 Details of Tax Deducted at Source from Salary Schedule TDS2 Details of Tax Deducted at Source from Salary Schedule DI – Details of Investment Presumptive Taxation under section 44AD Presumptive tax scheme under section 44AD is applicable to resident Individual taxpayers, Hindu Undivided Family HUF, and Partnership firms excluding limited liability partnership. The total turnover or the receipts of the business for the financial year must be less than Rs 2 crore. A sum equal to 8% of the total turnover or gross receipts of the assessee or a percentage higher than 8% shall be deemed to be the profits of such business. Presumptive Taxation under section 44ADA Presumptive tax scheme under section 44ADA is applicable to resident Individual taxpayers, HUFs, firms whose gross turnover or receipts from a professional income is less than Rs 50 lakhs. Under this scheme, the taxable income is deemed to be higher than 50% of the total gross receipt of income offered by the assessee. However, the profession must be eligible for the scheme: 1. Legal 2. Medical 3. Engineering 4. architectural profession 5. profession of accountancy 6. technical consultancy 7. interior decoration 8. Other professions and authorized representatives. Presumptive Taxation under section 44AE Section 44AE is applicable to the taxpayers who are running the business of plying, leasing, or hiring trucks. Additionally, the assessee is not holding more than 10 trucks at any time during the financial year. The total taxable income will be Rs 7,500 per vehicle per month or part of the month. The assessee cannot claim any other business expense under this scheme. DOCUMENT REQUIRED FOR FILING ITR-4: • Permanent Account Number (PAN) • Aadhaar Number • GSTIN No. and turnover as per GST returns • Match book turnover with GST returns • Form 16A & 16C (if any issued by deductor) and TDS certificate • Form 16 from employer. An employee who has change the job in Financial Year can have 2 or more form 16. • TDS certificate from employer • Match tax details with 26 AS • Statement of interest paid on house loans • Interest statements showing interest earned on savings bank account and fixed deposits • Proof of tax saving investments/expenses (80C to 80U) • Bifurcation of details of investment made during the period from April 1, 2020 to June 30, 2020. • Other investment documents, such as statement of interest paid on education loan etc. • Bank account details with IFSC code SERVICE PROVIDED & PROCESS: • Collection of necessary documents such as Form 16 (TDS Certificate issued by the employer in case tax is deducted from salary), Form 16A ( issued by the bank for TDS deducted on the interest payment on the fixed deposit) in the TRACES format & capital gain statement. TDS certificate should be digitally signed by the taxpayer. • Download Form 26AS & cross check with TDS certificate to ensure that tax deducted from taxpayer salary or from taxpayer interest income is deposited with the government. • In case of any error, rectify Form 26AS. If the error is not rectified, taxpayer won’t be able to claim credit on deducted tax. • Next step is to calculate total income chargeable to tax. • After this, taxpayer needs to calculate tax liability. • Once all the taxes are paid, taxpayer can proceed for Income Tax Return filing. taxpayer can only claim for refund if taxpayer file income tax return. • Verification of Income Tax Return • Receive e-verification acknowledgement • Department will process taxpayer return and will communicate through mail. CHOOSE REQUIRED PLAN: • Basic: ITR-4 FILING for taxable income upto 10 lakhs Service Fees- 2999/- Including Taxes • Standard: ITR-4 FILING for taxable income less than 25 lakhs Service Fees- 5999/- Including Taxes • Ace: ITR-4 FILING for taxable income more than 25 lakhs. Service Fees- 9999/- Including Taxes Working Process :

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Frequently Asked Question (FAQ’S)- Q- What are the benefits of opting for a presumptive tax scheme? A- A taxpayer opting for a presumptive tax scheme offers a fixed percentage of his/ her gross turnover/ receipts as the taxable income. Moreover, the assessee cannot claim any other business expense while arriving at the taxable income from the business/ profession. The scheme provides the assessee with the following benefits: 1. No maintenance of books of accounts as per section 44AA. For small and medium business organizations it is hassle-free and cost-effective to not maintain books of accounts. 2. Applicability of a simple and annexure less income tax return i.e. ITR 4 Form. The income tax department provides a quite simple income tax return for small and medium businesses. 3. Exemption from first 3 installments of advance tax. The taxpayers who opt for a presumptive scheme are liable to pay the entire amount of advance tax in one installment on or before 15th March. Q- Can I file ITR 4 offline also? A-Yes, you can file offline ITR 4 only if: a) Individual is of 80 years or more in age b) The income of individual is less than Rs. 5 lakh and who do not have to claim a refund in the income tax return. Q- If I am opting presumptive scheme so can i claim deduction of other expenditures and depreciation? A-No, if a person is paying tax @ 8% as per section 44AD then he cannot claim depreciation or any other expenditure. Q- Can the taxpayer declare higher or lower income? A-The taxpayer can voluntarily declare a higher income and pay tax on it. In case the taxpayer chooses to declare lower income than 50 % of the total gross receipts- he shall have to maintain books of accounts under 44AA and get them audited. Q-does professional need to maintain books of Account? A- Professionals opting for this scheme need not maintain books of account required under section 44AA. They also need not get the books of account get audited under section 44AB. ***