ITR-4, commonly known as Sugam, is applicable for individuals, HUFs, and firms (except LLPs) with specific income criteria and sources. For AY 2024-25, eligible entities must have an income below ₹50 lakh, derived from business and profession under presumptive schemes (44AD, 44ADA, 44AE), salary, pension, one house property, and limited other sources like interest income.
Those not eligible include RNORs, NRIs, individuals with income over ₹50 lakh, substantial agricultural income, directors in companies, or income from specified sources like lottery winnings. The choice between old and new tax regimes for business income requires filing Form 10-IEA before ITR submission, with a one-time switch back to the new regime.
Documentation needed includes Form 16, 26AS, bank statements, and receipts, while linking Aadhaar with PAN is recommended for full portal access. The presumptive taxation schemes (44AD, 44ADA, 44AE) simplify tax compliance for small taxpayers, with recent thresholds raised to ₹3 crore and ₹75 lakh, respectively, under certain conditions.
For professions like legal, medical, and engineering, gross receipts thresholds apply for opting into these schemes, simplifying advance tax payments and exempting from maintaining detailed accounts. Tax rebates under Section 87A differ between old and new regimes, impacting tax liabilities up to ₹7 lakh.
The due date for filing ITR-4 for AY 2024-25 is July 31, 2024, with options to switch tax regimes depending on Form 10-IEA submission. Understanding these FAQs helps taxpayers navigate their filings effectively under current tax laws.
Q.1 Who is eligible to file ITR-4 for AY 2024-25?
Ans. ITR-4 can be filed by a Resident Individual / HUF / Firm (other than LLP) who has:
- Income not exceeding ₹50 Lakh during the FY
- Income from Business and Profession which is computed on a presumptive basis u/s 44AD, 44ADA or 44AE
- Income from Salary/Pension, one House Property, Agricultural Income (up to ₹ 5000/-)
- Other Sources which include (excluding winning from Lottery and Income from Race Horses):
- Interest from Savings Account
- Interest from Deposit (Bank / Post Office / Cooperative Society)
- Interest from Income Tax Refund
- Family Pension
- Interest received on enhanced compensation
- Any other Interest Income (e.g., Interest Income from Unsecured Loan)
Q.2 Who is not eligible to file ITR-4 for AY 2024-25?
Ans. ITR-4 cannot be filed by an individual / HUF / Firm (Other than LLP) who:
- is a Resident but Not Ordinarily Resident (RNOR), or Non-Resident Indian
- has total income exceeding ₹ 50 Lakh
- has agricultural income in excess of ₹5,000/-
- is a Director in a Company
- has income from more than one House Property;
- has income of the following nature:
- winnings from lottery;
- activity of owning and maintaining race horses;
- income taxable at special rates u/s115BBDA or Section 115BBE;
- has held any unlisted equity shares at any time during the previous year
- has deferred income tax on ESOP received from employer being an eligible start-up
- is not covered under the eligibility conditions for ITR-4
Q.3 I am an individual having business income can I opt for old tax regime while filing ITR-4 ?
Ans. Yes you can opt for old tax regime if you have business income but for opting old Tax regime you have to file From 10 IEA before filing the ITR.
Q.4 I am an individual having business income can I switch between New tax regime and old tax regime every year ?
Ans. Individuals having business income are not eligible to choose between the new and old tax regimes every year. Once they have opted for the old tax regime, they only have a one-time option of switching back to the New tax regime in their lifetime. Once they switch back, they cannot opt for the old tax regime again.
Essentially, people with business income may have to fill out Form 10-IEA twice, once to use the Old tax regime and the second to switch back to the New regime.
Q.5 What is the due date of filing form 10 IEA for opting/withdrawing Old tax regime?
Ans. As per the income tax laws, an individual having business income shall submit form 10-IEA before the due date of filing ITR i.e. July 31 under non-audit cases and 31st October under audit applicable cases.
Q.6 Whether all deductions will be available to claim while filing ITR-1 return?
Ans. Yes, all deductions will be available to claim in the return once taxpayer will change the option of default new tax regime to old tax regime by selecting the below question as ‘Yes with the due date’ after filing Form 10-IEA within the due date and furnish Date of filing of Form 10IEA and Acknowledgement number in the return under Personal Information:
By default, it will be selected as ‘No’ for new tax regime and all deductions will be disabled in return. Once option will be changed to old tax regime after selecting ‘Yes with the due date’ after furnishing Form 10IEA details then all deductions will get enabled and then taxpayer will be able to claim all deductions.
Q.7 What documents do I need to file ITR-4? Is it necessary to link Aadhaar with PAN to file ITR?
Ans. You will need to keep the below documents ready (as applicable) to file 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.
Linking of Aadhaar and PAN is important. However, you would still be able to file your ITR if your PAN is not linked with Aadhaar, but you will have limited access on the portal. It is therefore advisable to link PAN with Aadhaar.
Q.8 What is the presumptive taxation scheme for users filing ITR-4?
Ans. According to Sections 44AA of the Income Tax Act (1961), a person engaged in business or profession needs to maintain regular books of accounts under certain circumstances as per specific conditions. To relieve small taxpayers from such compliance burden, the Income Tax Act has framed the presumptive taxation scheme u/s 44AD, 44ADA and 44AE. A person adopting the presumptive taxation scheme can declare income at a prescribed rate. The Act has laid out presumptive taxation schemes (for ITR-4 users) as given below: ·
- Section 44AD:Computation of income on estimated basis in the case of taxpayers (being a Resident Individual, Resident HUF, or Resident Partnership Firm (other than LLP) engaged in certain business subject to certain conditions.
- Section 44ADA:Computation of professional income on estimated basis for Assessee being a resident in India and engaged in a profession referred to in section 44AA (1) subject to certain conditions.
- Section 44AE:Computation of income on estimated basis in the case of taxpayers (being an Individual, HUF, Firm (other than LLP) or any other person being a resident or non-resident) engaged in the business of plying, leasing or hiring goods carriages, who owns not more than ten goods carriages at any time during the previous year.
Q.9 What is the Threshold limit to Opt for the presumptive taxation scheme under section 44AD & Section 44 ADA?
Ans. Section 44AD and Section 44ADA limit has been increased to 3crore (Previously, 2crore) and 75lakh (Previously, 50 lakh) respectively provided amount or aggregate of the amounts received during the previous year, in cash, does not exceed 5% of the total gross receipts of such previous year.
Q.10 Who is not eligible for the presumptive taxation scheme of Section 44AD?
Ans. The scheme of Section 44AD is designed to give relief to small taxpayers engaged in any business, except the following businesses:
- Business of plying, hiring, or leasing goods carriages referred to in sections 44AE
- A person carrying on any agency business
- A person earning income in the form of commission or brokerage (e.g., insurance agents)
- Any business whose total turnover or gross receipts exceeds ₹ 2 Crore
- Any business whose total turnover or gross receipts exceeds ₹ 3 Crore (in case amount or aggregate of the amounts received during the previous year, in cash, does not exceed 5% of the total gross receipts of such previous year)
- Apart from the above, a person who is required to maintain books of accounts as referred to in Section 44AA (1) is not eligible for presumptive taxation scheme u/s 44AD.
Q.11 The gross receipts for my business in the year are more than ₹ 3 Crore. Can I opt for presumptive taxation scheme of 44AD?
Ans. No. You can opt for the presumptive taxation scheme of section 44AD only if the total turnover or gross receipts from your business do not exceed the limit prescribed (i.e., ₹ 3 Crore).
Q.12 Who can opt for presumptive taxation scheme of Section 44ADA?
Ans. The presumptive taxation scheme of Section 44ADA can be adopted by a assessee being individual or partnership firm (other than LLP) and resident in India carrying on specified profession whose gross receipts do not exceed ₹ 50 Lakh in a FY.
Provided that in case the amount or aggregate of the amounts received during the previous year, in cash, does not exceed five per cent of the total gross receipts of such previous year, then the limit is upto 75 Lakh in a FY.
Following professions are specified profession:
- Legal
- Medical
- Engineering or Architectural
- Accountancy
- Technical Consultancy
- Interior Decoration
- Any other Profession as notified by CBDT
Q.13 I opted for presumptive income scheme of Section 44AD or 44ADA. Can I claim further deduction of expenses after declaring profit at applicable rate under respective sections of gross receipts?
Ans. No, a person who opted for the presumptive taxation scheme is deemed to have claimed all deduction of expenses. Any further claim of deduction is not allowed after declaring profit at specified rate. However, you can claim deductions under Chapter VI-A.
Q.14 I opted for the presumptive income scheme of Section 44ADA. Do I have to pay Advance Tax in respect of income from profession covered in Section 44ADA?
Ans. Yes. Anyone opting for the presumptive taxation scheme u/s 44ADA is liable to pay 100% of Advance Tax on or before 15th March of the previous year. If you fail to pay the Advance Tax by 15th March of previous year, you will be liable to pay interest as per Section 234B and Section 234C. Any amount paid by way of Advance Tax on or before 31st March will also be treated as Advance Tax paid during the FY ending on that day.
Q.15 I opted for presumptive taxation scheme of Section 44ADA. Do I need to maintain books of accounts as per Section 44AA?
Ans. If you are engaged in a specified profession as referred in Sections 44AA (1) and opt for presumptive taxation scheme of Section 44ADA (declare income @50% of the gross receipts), you are not required to maintain the books of accounts in respect of specified profession (i.e., the provision of Sections 44AA will not apply).
Q.16 I opted for the presumptive taxation scheme of Section 44AE. Do I have to pay Advance Tax in respect of income from business covered in Section 44AE?
Ans. Yes, you will be liable to pay Advance Tax. There is no concession with regard to the payment of advance tax if you opted for the presumptive taxation scheme of section 44AE.
Q.17 How do I compute income from a house property which is partly self-occupied and partly let-out?
Ans. A House Property may consist of two or more independent units, one of which is self-occupied and the remaining is used for any other purpose (i.e., let-out or used for own business). Income from such property will be computed in the following manner:
1. Part / unit which is occupied by you for your residence throughout the year will be treated as an independent property and income from such a part / unit will be computed in the manner as described in the ITR-4 user manual in case of a self-occupied property.
2. Part / unit which is let out will be treated as an independent property and income from such a part/unit will be computed in the manner as described in the ITR-4 user manual in case of let out property.
Q.18 Do I need to file any form if I am claiming deduction u/s 80 DD and 80 U?
Ans. From AY 2024-25 new schedules have been added regarding deduction u/s 80 DD and 80 U. If you want to claim deduction u/s 80DD and 80U then you have to mandatorily file from 10 IA before filing the return of Income and enter the details (Date of filing form and acknowledgement no.) of Form 10 IA in Schedule 80 DD and 80 U while filing the return of Income.
Q.19 What is the tax treatment of unrealized rent that is subsequently realized?
Ans. Any subsequent recovery of unrealized rent will be deemed to be your income under the head Income from House Property in the year in which such rent is realized (whether or not you are the owner of that property in that year). It will be charged to tax after deducting a sum equal to 30% of unrealized rent.
Q.20 Can my employer PAN be quoted in place of TAN?
Ans. No. PAN should never be quoted in the textbox where TAN is to be quoted, as the purposes for which PAN and TAN are allotted are different. TAN is a unique identification number which is allotted to parties who deduct or collect tax at source. PAN is a unique identification number issued to keep a linking of the transactions carried by a person like payment of tax, TDS / TCS credit, Return of Income, Return of Wealth, correspondence with the Income Tax Department or correspondence by the ITD, investments made by a person, loan taken by a person, etc.
Q.21 What is the due date of Filing ITR -4 for AY 2024-25 (FY 2023-24)?
Ans. For AY 2024-25 (FY 2023-24) the due date of filing of ITR-4 is 31st July 2024.
Q.22 I have filed ITR-4, New Tax regime in FY 2021-22. In FY 2022-23, I have filed ITR-1, Old Tax regime. What are my option available for FY 2023-24?
Ans. The Finance Act, 2023 has amended the provisions of Section 115BAC to make it the default tax regime from the FY 2023-24 (AY 2024-25) for the assessee being an Individual, and HUF.
If an assessee does not want to pay tax according to the New tax regime, he will have to explicitly opt out of it and choose to be taxed under the old tax regime.
An assessee having income from a business or profession can opt out of the new tax regime and switch to the old tax regime for a relevant year. However, he has to exercise this option in Form No. 10-IEA on or before the due date for filing the return of income under Section 139(1).
Q.23 What is Rebate u/s 87 A as per new Tax Regime (Default) and Old tax regime?
Ans. Currently, section 87A allows individuals to claim a rebate of Rs 12,500 under the old tax regime and Rs 25,000 under the new tax regime.
Till March 31, 2023 (FY 2022-23), section 87A tax rebate under old and new tax regime was available for taxable income up to Rs 5 lakh. Hence, opting for old or new tax regime made no difference for an individual having taxable income up to Rs 5 lakh.
However, to make the new tax regime more attractive, the tax rebate was increased to Rs 25,000 for New Tax regime only. This made zero tax payable for taxable income up to Rs 7 lakh in the new tax regime for FY 2023-24 (from April 1, 2023).
