Decoding ITR-4 (Sugam): Guide for Small Taxpayers

ITR-4 (Sugam) Overview:

ITR-4 is an income tax return form designed for individuals, Hindu Undivided Families (HUFs), and firms who have opted for the presumptive taxation scheme under sections 44AD, 44ADA, or 44AE of the Income Tax Act, 1961. It is commonly known as the Sugam form and is suitable for small taxpayers with business or professional income.

Who Should File ITR-4:

1. Individuals, HUFs, or firms opting for the presumptive taxation scheme under sections 44AD, 44ADA, or 44AE.
2. Freelancers such as content writers, bloggers, vloggers, etc.
3. Professionals like chartered accountants, doctors, lawyers, engineers, etc., whose income is computed on a presumptive basis.
4. Individuals earning salary income and additional income from freelancing activities or part-time business.
5. Individuals making profits through Futures and Options (F&O), cryptocurrency, commodities, or forex.

Important Points:

1. Revised Presumptive Taxation Limits: The Union Budget 2023 revised the presumptive taxation limits for FY 2023-24 (AY 2024-25). For small businesses under section 44AD, the limit increased from Rs. 2 crore to Rs. 3 crore, and for professionals under section 44ADA, the limit increased from Rs. 50 lakh to Rs. 75 lakh.
2. Section 80CCH: The updated ITR-4 form includes a column for disclosing the amount eligible for deduction under Section 80CCH. This section allows individuals enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund to claim a tax deduction for the total amount deposited in the Agniveer Corpus Fund.

3. Sections in ITR-4:

   • Personal Information
   • Gross Total Income
   • Disclosures and Exempt Income
   • Total Deductions
   • Taxes Paid

   • Total Tax Liability

4. Filing Methods:

   • Online Mode: Taxpayers can file their ITR-4 through the e-Filing portal of the Income Tax Department. They need to log in, fill in the required details, validate the information, and verify the return electronically.
   • Offline Mode: Taxpayers can also file their ITR-4 offline by using the offline utility provided by the Income Tax Department.

5. Steps to File ITR-4 Online:

   • Log in to the e-Filing portal.
   • Select the Assessment Year and Mode of Filing.
   • Fill in personal and income details.
   • Review and confirm the information.
   • Pay tax (if applicable) and verify the return.
6. Verification: It is mandatory to verify the return after filing. Taxpayers can verify their returns electronically through methods like Aadhaar OTP, Net Banking, or Electronic Verification Code (EVC).
7. Acknowledgment: After successful filing and verification, taxpayers receive an acknowledgment number. This serves as proof of filing the return and is required for future reference.

Filing income tax returns accurately and on time is crucial to avoid penalties and comply with tax laws. Taxpayers should ensure they use the correct form and provide accurate information to the best of their knowledge.