In this article, I have tried to explain the eligibility, manner of filing and about obligation to file ITR-4 for AY 2020-21/FY 2019-20 which is generally applicable to  Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE and is Not for an individual who is either Director in a company or has invested in unlisted equity shares.

ITR-4 with other ITRs alongwith manner of furnishing Return of Income for Assessment Year (AY) 2020-21 / Financial year (FY) 2019-20 is been notified by CBDT vide Notification No. 31/2020 dated 29.05.2020.

1. Who is eligible to use Form ITR-4 (Sugam) for A.Y. 2020-21?

This form is for Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakhs and having income from business and profession which is computed under Section 44AD, 44ADA or 44AE of the Income Tax Act, 1961.

Note 1: The income computed on presumptive basis under sections 44AD or 44ADA or 44AE shall be presumed to have been computed after giving full effect to every loss, allowance, depreciation or deduction under the Income-tax Act.

Note 2: In a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this ITR Form can be used only if the income being clubbed falls into the above income categories.

2. Who is not eligible to use Form ITR-4 (Sugam) for A.Y. 2020-21?

A. This ITR Form should not be used by an individual who –

(a) is a Director in a company; or

(b) has held any unlisted equity shares at any time during the previous year; or

(c) has any asset (including financial interest in any entity) located outside India; or

(d) has signing authority in any account located outside India; or

(e) has income from any source outside India.

B. This ITR form also cannot be used by an individual who has any income of the following nature during the previous year:-

(a) Profits and gains from business and professions; or

(b) Capital gains; or

(c) Income from more than one house property; or

(d) Income under the head other sources which is of following nature:-

(i) winnings from lottery; or

(ii) activity of owning and maintaining race horses; or

(iii) income taxable at special rates under section 115BBDA or section 115BBE; or

(e) income to be apportioned in accordance with provisions of section 5A; or

(f) agricultural income in excess of ₹5,000.

C. Further, this ITR form also cannot be used by an individual who has any claims of loss/deductions/relief/tax credit etc. of the following nature:-

(a) any brought forward loss or loss to be carried forward under the head “Income from house property”; or

(b) loss under the head Income from other sources”; or

(c) any claim of relief under section 90 and/or section 91; or

(d) any claim of deduction under section 57, other than deduction under clause (iia) thereof (relating to family pension); or

(e) any claim of credit of tax deducted at source in the hands of any other person.

3. ITR-4 (Sugam) is not mandatory

Form ITR-4 (Sugam) is a simplified return form to be used by an assessee, at his/her option, if the assessee is eligible to declare profits and gains from business and profession on presumptive basis under section 44AD, 44ADA or 44AE.

However, in case the assessee keeps and maintains all books of accounts and other documents referred to in section 44AA, and also gets his/her accounts audited and obtains an audit report as per section 44AB, filling up the Form ITR-4 (Sugam) is not mandatory. In such a case, other regular ITR forms viz. ITR-3 or ITR-5, as applicable, should be used and not this Form.

4. Annexure-less ITR Form

No document (including TDS certificate) should be attached to this ITR Form.

5. Manner of filing Form ITR-4 (Sugam) for A.Y. 2020-21

This ITR Form can be filed with the Income-tax Department in any of the following ways:-

(A) electronically on the e-filing web portal of Income-tax Department (www.incometaxindiaefiling.gov.in) and verified in any one of the following manner –

(i) digitally signing the verification part, or

(ii) authenticating by way of electronic verification code (EVC), or

(iii) by sending duly signed paper Form ITR-V (Acknowledgment) by post to CPC at the following address –

Post Bag No. 1, Electronic City Office, Bengaluru- 560500, Karnataka”.

The Form ITR-V should reach within 120 days from the date of e-filing the return of income.

(B) in paper form, at the designated offices of Income-tax Department, along with duly signed Form ITR-V. This mode of furnishing return of income is permissible only in case of super senior citizens (i.e. an individual of the age of 80 years or more at any time during the previous year).

6. Filling out the acknowledgment

Where the ITR Form is furnished in paper form, the Acknowledgment/ ITR-V should be duly filled by the assessee. In case of e-filing, the Acknowledgement/ITR-V is auto generated by the portal and can be downloaded by the assessee.

7. Obligation to file return of income for A.Y. 2020-21

Every Individual or HUF whose total income before allowing deductions under Chapter VI-A of the Income-tax Act, exceeds the maximum amount which is not chargeable to tax is obligated to furnish his/its return of income. The claim of deduction(s) under Chapter VI-A is to be mentioned in Part C of this ITR Form. In case of any doubt, please refer to relevant provisions of the Income-tax Act. The maximum amount which is not chargeable to income tax for Assessment Year 2020- 21, in case of different categories of individuals and HUF, is as under:-

Sl. No. Category Amount (in ₹)
(i) In case of an individual who is below the age of 60 years or a Hindu Undivided Family (HUF) 2,50,000
(ii) In case of an individual, being resident in India, who is of the age of 60 years or more at any time during the previous year 2019-20 but below the age of 80 years 3,00,000
(iii) in case of an individual, being resident in India, who is of the age of 80 years or more at any time during the previous year 2019-20 5,00,000

In case of Partnership firms, every firm is required to furnish the return of income in this ITR Form, where profits or gains from business or profession are computed on presumptive basis under Section 44AD, Section 44ADA or Section 44AE.

Also Read:-

S. No. Particulars
1 A.Y. 2020-21 ITR Forms: Eligibility Criteria & Changes
2 All about filing of ITR-1 (Sahaj) for AY 2020-21
3 All about filing of ITR-2 for AY 2020-21
4 All about filing of ITR-3 for A.Y. 2020-21
5 All about filing of ITR-4 (Sugam) for A.Y. 2020-21
6 All about filing of ITR-5 for A.Y. 2020-21
7 All about filing of ITR-6 for A.Y. 2020-21
8 All about filing of ITR-7 for A.Y. 2020-21

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