A Simple Guide to Filing ITR 4: Step-by-Step Instructions

Filing Income Tax Returns (ITR) can be a daunting task, especially for small business owners, freelancers, and professionals who opt for the presumptive taxation scheme under ITR-4 (Sugam). This form is designed for individuals, HUFs, and partnership firms with income from business or profession under Section 44AD, 44ADA, or 44AE of the Income Tax Act.

To simplify the process, here are the top 5 tips for filing ITR-4 easily while ensuring compliance and avoiding last-minute hassles.

1. Understand Who Should File ITR-4:

Before you begin, ensure that ITR-4 is the correct form for you. ITR-4 is applicable if:

• You are a resident individual, HUF, or partnership firm (not an LLP).
• Your income includes business income under presumptive taxation (Section 44AD, 44ADA, or 44AE).
• Your total income does not exceed ₹50 lakhs (if opting for presumptive taxation).
• You do not have income from capital gains, foreign assets, or lottery winnings (as these require ITR-3 instead).

Pro Tip: If you have salary income along with business income, you can still file ITR-4, but ensure all details are accurately reported.

2. Gather All Necessary Documents in Advance

Filing ITR-4 smoothly requires proper documentation. Here’s a checklist:

A. Personal & Business Details

• PAN card
• Aadhaar card (linked with PAN)
• Bank account details (for refunds)
• Business registration documents (if applicable)

B. Income & Expense Details

• Gross receipts/turnover (for presumptive taxation under Section 44AD/44ADA)
• Profit & Loss Statement (if maintaining books)
• Bank statements (to verify income deposits)
• Form 26AS (for TDS details)
• Form 16A/16B/16C (if TDS deducted on payments)

C. Tax Payment Proofs

Challan details (if advance tax or self-assessment tax paid)

Pro Tip: Use the Annual Information Statement (AIS) on the Income Tax Portal to cross-check all financial transactions.

3. Compute Income Under Presumptive Taxation Correctly

One of the biggest advantages of ITR-4 is the presumptive taxation scheme, where you can declare income at a prescribed rate without maintaining detailed books:

Section 44AD (Business Income):

Declare 8% of turnover (6% for digital receipts) if turnover ≤ ₹2 crores.

No need for audit if income declared is above the deemed profit rate.

Section 44ADA (Professionals like Doctors, Lawyers, etc.):

Declare 50% of gross receipts as income (if receipts ≤ ₹50 lakhs).

Section 44AE (Freight Operators):

Declare ₹1,000 per ton per month for heavy vehicles or ₹7,500 per month for other vehicles.

Pro Tip: If actual profits are lower than the presumptive rate, you can declare lower income but must maintain books and get audited if turnover exceeds the threshold.

4. File Before the Deadline & Verify ITR Promptly

A. Know the Due Dates

July 31 (for most individual taxpayers)

October 31 (if audit is required)

Filing late can attract penalties:

₹5,000 if filed after due date but before December 31.

₹10,000 if filed after December 31 (with a reduced penalty of ₹1,000 for income ≤ ₹5 lakhs).

B. E-Verify Your ITR

After filing, verification is mandatory within 30 days to complete the process. You can verify via:

Aadhaar OTP (instant)

Electronic Verification Code (EVC) via net banking

Sending a signed ITR-V to CPC Bengaluru (if no digital option)

Pro Tip: Use the pre-filled JSON option on the IT portal to auto-fill details from Form 16, 26AS, and AIS for faster filing.

5. Use the Right Tools & Seek Professional Help if Needed

A. Use Income Tax E-Filing Portal & Offline Utility

The ITR-4 Sugam form is available online at  www.incometax.gov.in.

You can also use the offline Excel utility for easier data entry.

B. Tax Filing Software

Platforms like ClearTax, Tax2Win, or H&R Block simplify ITR-4 filing with step-by-step guidance.

C. Consult a CA if Complex Cases Arise

If you have:

Multiple sources of income

Discrepancies in Form 26AS

High-value transactions not reflected in books

A Chartered Accountant (CA) can help avoid errors and ensure compliance.

Consult a CA or use the Income Tax helpline (1800 180 1961).

Other Related Blogs:

15 Benefits of ITR Filing

Simple Guide to Filing ITR1 Sahaj

FAQs on ITR-4 Filing: Presumptive Taxation for Small Businesses & Freelancers

1. Who should file ITR-4?

Answer: ITR-4 is for individuals, HUFs, and partnership firms (not LLPs) with income from:

Business under Section 44AD (Presumptive Taxation)

Profession under Section 44ADA (Doctors, Lawyers, Freelancers, etc.)

Freight operators under Section 44AE

Total income ≤ ₹50 lakhs (if opting for presumptive scheme).

❌ Not for: Salaried employees (unless with business income), capital gains, or foreign income.

2. What is the due date for filing ITR-4?

Answer:

July 31 (for most taxpayers).

October 31 (if audit is required).

⚠️ Late filing penalty: ₹5,000 (after July 31 but before Dec 31) or ₹10,000 (after Dec 31; reduced to ₹1,000 if income < ₹5 lakhs).

3. How is income calculated under presumptive taxation (Section 44AD/44ADA)?

Answer:

Business (44AD): Declare 8% of turnover (6% for digital payments).

Professionals (44ADA): Declare 50% of gross receipts as income.

No need for books of accounts if turnover ≤ ₹2 crore (business) or ₹50 lakhs (professionals).

???? Pro Tip: If actual profit is lower, you can declare it but must maintain books and get audited if turnover exceeds limits.

4. What documents are needed for ITR-4 filing?

Answer:
✔ PAN & Aadhaar (linked)
✔ Bank details (for refunds)
✔ Form 26AS (for TDS credits)
✔ Form 16A/16B/16C (if TDS deducted)
✔ Profit & Loss statement (if not opting for presumptive scheme)

???? Check: AIS (Annual Information Statement) for unreported transactions.

5. Can I file ITR-4 if I have salary + business income?

Answer: Yes! But:

Salary income must be reported separately.

Business income must qualify for presumptive taxation (≤ ₹50 lakhs).

Total income = Salary + Presumptive Business Income.

???? Cannot use ITR-4 if you have capital gains, house property income, or lottery winnings.

6. How to verify ITR-4 after filing?

Answer: Verification is mandatory within 30 days via:

Aadhaar OTP (instant)

EVC (via Net Banking or Demat account)

Signed ITR-V (send to CPC Bengaluru if no digital option).

???? Track status: Log in to incometax.gov.in > "View Returns/Forms".

7. What if I make a mistake in ITR-4?

Answer: File a revised return (ITR-U) within:

Dec 31 of the assessment year (e.g., for FY 2023-24, deadline: Dec 31, 2024).

Up to 2 revisions allowed.

⚠️ Note: Late revisions may attract penalties for underreported income.

8. Is audit required for ITR-4 filers?

Answer: No audit needed if:

You opt for presumptive taxation (Sections 44AD/44ADA/44AE).

Turnover ≤ ₹2 crore (business) or ₹50 lakhs (professionals).

Audit required if:

You declare profits below the presumptive rate.

Turnover exceeds the above limits.

9. Can I claim deductions (80C, 80D) in ITR-4?

Answer: Yes! Deductions under:

Section 80C (PPF, ELSS, Life Insurance)

Section 80D (Health Insurance)

Section 24(b) (Home Loan Interest, if applicable)

can be claimed even under presumptive taxation.

10. Where can I get help for ITR-4 filing?

Answer:

Income Tax Portal Helpdesk: 1800 180 1961

E-filing tutorials: YouTube

CA/ Tax Expert: Karsaathi