ITR-4 Filing

Income Tax Return (ITR) Form 4, known as ITR-4, is a vital document designed for individuals and Hindu Undivided Families (HUFs) who have chosen the presumptive taxation scheme under sections 44AD, 44ADA, or 44AE of the Income Tax Act. ITR-4 simplifies the process of tax compliance, making it more convenient to report income and calculate tax liability.

Key Features of ITR-4:

Presumptive Taxation: ITR-4 is specially tailored for individuals who have opted for the presumptive taxation scheme. This scheme allows taxpayers to determine their income based on a prescribed percentage of their total turnover, eliminating the need for complex bookkeeping and detailed financial statements.

Business and Profession Income: ITR-4 enables taxpayers to report income from proprietary businesses, partnership firms, or any other source of income covered under the specified sections of the Income Tax Act. It's an ideal choice for those engaged in various business activities.

Comprehensive Deductions: Taxpayers using ITR-4 can claim eligible deductions and exemptions under the Income Tax Act to reduce their taxable income and lower their overall tax liability. This provides opportunities to optimize tax planning strategies.

Who Should File ITR-4?

ITR-4 is the suitable choice for individuals and HUFs who meet specific criteria and are part of the presumptive taxation scheme. You should consider filing ITR-4 if you fall into one of the following categories:

Proprietors, self-employed individuals, or professionals who have opted for the presumptive taxation scheme under sections 44AD, 44ADA, or 44AE.

Small business owners, retailers, and service providers with annual turnover within the specified limits as per the scheme.

Individuals engaged in specific professions like consulting, medical practice, legal practice, technical services, and more.

Benefits of Using ITR-4:

Choosing ITR-4 offers several advantages for taxpayers:

• Simplified Tax Reporting: ITR-4 simplifies the process of tax filing by allowing income calculation based on presumptive percentages, reducing the need for complex accounting.
• Accurate Tax Liability: The form enables accurate reporting of business and professional income, ensuring that taxpayers pay the correct amount of tax.
• Tax Optimization: Taxpayers can benefit from available deductions and exemptions to optimize their tax liability and save on taxes.

Key Scetions:

1. Personal Information (Section 3.1):

Review and verify pre-filled data. You can't edit some details directly here, but you can update them in your e-Filing profile.

2. Gross Total Income (Section 3.2):

Review pre-filled information and check details for salary/pension, house property, business/profession, and other sources. Enter missing information, if any.

Note: Some parts might be grayed out depending on whether you're an HUF or a firm (other than LLP).

3. Disclosures and Exempt Income (Section 3.3):

Provide details of business financial particulars, GST gross receipts (optional), and exempt income.

4. Total Deductions (Section 3.4):

Add and verify deductions you claim under Chapter VI-A of the Income Tax Act.

5. Taxes Paid (Section 3.5):

Verify taxes paid in the previous year, including TDS from salary, TCS, advance tax, and self-assessment tax.

6. Total Tax Liability (Section 3.6):

View your income and tax computation, and total tax, cess, and interest. Double-check these details based on your input in previous sections.

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Documents reuquired for filing ITR 4:

• Form 16
• Form 26AS & AIS
• Form 16A
• Bank Statements
• Housing Loan Interest Certificates
• Receipts for Donation Made
• Rental Agreement
• Rent Receipts
• Investment premium payment receipts - LIC, ULIP etc

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Procedure for filing ITR 4 online:

Log in to the e-Filing portal using your PAN and password.

Click "e-File > Income Tax Returns > File Income Tax Return".

Select assessment year (2023-24) and filing mode (online).

Choose your status and proceed.

Select the type of ITR:

Wizard-based return filing: ideal if unsure which ITR to use.

Direct ITR-4 selection: for confident users.

Read instructions carefully and note required documents. Click "Let's Get Started".

Review pre-filled data, edit if necessary, and enter missing details. Confirm each section after completion.

8a/b/c/d: Opting for New Tax Regime:

Choose "Yes/No" based on past opt-in/out status.

If opting now, enter acknowledgement number and date of Form 10IE filing.

If opting in, you'll see a pop-up about ineligible deductions; click "Proceed".

Enter income and deduction details in respective sections.

Tax liability:

If applicable, you'll see tax computation and payment options ("Pay Now" or "Pay Later").

Pay Now is recommended to avoid interest charges.

No tax liability/refund:

You'll be directed to the Preview Return page.

Successful payment:

A confirmation message will appear. Click "Back to Return Filing".

Preview your return.

Submit and validate your return.

Verify your return:

Choose e-Verification (recommended) for a faster and paperless process.

Alternatively, select "e-Verify Later" to file now and verify within 30 days.

Choose your preferred e-Verification method and proceed.

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Get Expert Assistance with ecfile

While ITR-4 simplifies tax compliance for those under the presumptive taxation scheme, it's crucial to choose the right form and ensure accurate tax reporting. At ecfile, we understand the intricacies of the Indian tax system, and we're here to help you every step of the way. Our team of experts can provide professional guidance and assistance, ensuring that your tax filing is accurate and in compliance with tax laws.

Let us simplify your tax journey and optimize your financial decisions. Contact ecfile today for expert assistance with your ITR-4 filing.