ITR 4 Filing Guide for FY 2024-25: New Tax Regime

Decoding Your ITR 4: A Step to Step Guide for Filing ITR 4 Under the New Tax Regime (FY 2024-25 / AY 2025-26)

If you’re a freelancer, a small business owner, or someone with income from a profession – essentially, if your income doesn’t just come from a straightforward salary or one house property – then ITR 4, also known as “Sugam,” is probably your go-to form. And with the new tax regime now being the default for Financial Year 2024-25 (that’s Assessment Year 2025-26), it’s important to understand how to file it, even if you’re using the presumptive taxation scheme.

Is ITR 4 Your Form This Year?

Let’s quickly check if “Sugam” is indeed the right fit for your tax journey. ITR 4 is ideal for resident individuals, Hindu Undivided Families (HUFs), and Partnership Firms (excluding LLPs) whose total income hits a maximum of ₹50 Lakhs, and this income comes from:

• Business Income: Specifically, if you’ve opted for the presumptive taxation scheme under Section 44AD or 44AE. This is a simplified way of declaring income for small businesses and those running a few goods carriages.
• Professional Income: If you’re a professional (think doctor, lawyer, architect, etc.) and you’ve chosen the presumptive taxation scheme under Section 44ADA.
• Salary/Pension: Yes, if you also have this income alongside your business/professional income.
• One House Property: Income from a single house property (as long as you’re not carrying forward losses from previous years).
• Other Sources: Like interest from your savings, fixed deposits, or dividends.

So, when is ITR 4 not for you?

You’ll need a different form if you:

• Have a total income exceeding ₹50 Lakhs.
• Are a company director or own unlisted equity shares.
• Have assets or signing authority outside India, or income from foreign sources.
• Are subject to TDS under Section 194N (for large cash withdrawals).
• Are claiming relief under Section 89A (income from foreign retirement accounts).
• Have income from more than one house property.
• Have winnings from lotteries, horse races, or other speculative income.
• Need to carry forward losses from previous years or declare losses under “Income from Other Sources.”
• Are running a business where you don’t opt for the presumptive taxation scheme, or your turnover exceeds the presumptive limits.

What’s the Big Deal with the New Tax Regime for FY 2024-25 in ITR 4?

The new tax regime is all about simplicity. It offers lower tax rates, but in exchange, you give up most of those common deductions and exemptions we’ve grown used to.

• Universal Basic Exemption: Everyone gets a basic exemption limit of ₹3 Lakhs, regardless of age. No special higher limits for seniors here.
• Standard Deduction (for Salary/Pension): If you have salaried income, you’ll still get your ₹75,000 standard deduction.
• Sweet Rebate under Section 87A: This is a fantastic benefit! If your total taxable income (after any permissible deductions) is up to ₹7 Lakhs, your tax liability becomes zero. Yes, zero.
• No Presumptive Tax Benefit from Deductions: This is key for ITR 4 filers. When you opt for a presumptive scheme (44AD, 44AE, 44ADA), the whole idea is that you declare a certain percentage of your turnover/gross receipts as profit, and in return, you don’t claim any business expenses. The new tax regime compounds this by also taking away most of your Chapter VI-A deductions (like 80C, 80D, etc.). The simplicity is the trade-off.

Documents to Get Ready

Before you even log in, gather these papers. It’ll make the filing process much smoother:

• Your PAN and Aadhaar.
• Bank Statements/Passbooks: Especially important for tracking your turnover/gross receipts, and for interest income.
• Form 26AS (Tax Credit Statement): Always check this on the e-filing portal to see all the taxes already deducted or collected.
• Annual Information Statement (AIS) & Taxpayer Information Summary (TIS): These are vital! They give you a comprehensive picture of all your financial transactions reported to the tax department, helping you verify the pre-filled data. Download them from the e-filing portal.
• Turnover/Gross Receipts Details: Keep a clear record of your total sales or professional receipts for the financial year.
• Details of Other Income: For any income not related to your business/profession (like dividends, interest from FDs, etc.).
• Bank Account Details for Refund: Make sure the bank account where you want any refund to go is pre-validated on the e-filing portal.

Your Practical, Step-by-Step Guide to Filling ITR 4 Online (New Regime)

The Income Tax Department’s e-filing portal has been constantly updated to make things easier. Let’s get started.

Step 1: Get Logged In

• Go to the official Income Tax e-filing website: www.incometax.gov.in.
• Click “Login.” Punch in your User ID (which is your PAN), your password, and solve the quick captcha. Then, “Continue.”

Step 2: Kick Off the Filing Process

• From your dashboard, find e-File > Income Tax Returns > File Income Tax Return.
• Select the Assessment Year as “2025-26”.
• Choose “Online” for the Mode of Filing – it’s usually the most straightforward way.
• Click “Continue.” If you’ve started before, you can “Resume Filing”; otherwise, hit “Start New Filing.”

Step 3: Tell Them Who You Are and What Form You’re Using

• Select your Status as “Individual” (or HUF/Firm, if applicable).
• The system will suggest forms based on your profile. Pick “ITR 4 (Sugam).”
• Click “Proceed with ITR 4.”

Step 4: The “Let’s Get Started” Checkpoint – Why Are You Filing?

• You’ll see a quick summary of what ITR 4 covers. Click “Let’s Get Started.”
• Now, the portal will ask for your Reason for filing ITR. For most ITR 4 filers, it’s: “Taxable income is more than the basic exemption limit.” Select other relevant options if they apply to you (e.g., claiming a refund).

Step 5: Personal Information – And Your Crucial Tax Regime Choice!

• Review Your Details: Your personal info (PAN, Aadhaar, name, contact details) will be pre-filled. Double-check everything! If anything’s wrong, update your e-filing profile first.
• Nature of Business/Profession: This is where you declare your business type or profession. Make sure it’s accurate.
• Choosing Your Tax Regime: This is the most vital part for this year.
  • For AY 2025-26, the New Tax Regime is the default.
  • You’ll see a clear question: “Do you want to opt out of the New Tax Regime?”
  • If you want to file under the NEW Tax Regime, you MUST select “No.” (This tells the system you’re sticking with the default new regime.)
  • If you choose “Yes,” you’re opting for the old tax regime, and then you’ll see fields for various deductions.
• Bank Details: Verify that your bank account(s) are correctly listed and pre-validated. This is where any refund will land. Add or delete accounts as needed, ensuring at least one is validated for refunds.
• Hit “Confirm” to save this section.

Step 6: Gross Total Income – Entering Your Earnings (Presumptive Way!)

• This section will pull in pre-filled data from your AIS, Form 26AS, and any Form 16 you might have. Go through each part carefully:
  • Income from Salary/Pension: If you have this income, it’ll be here. The ₹75,000 standard deduction for salaried individuals/pensioners will be automatically applied.
  • Income from House Property: If you have a single house property, enter its details. For a rented property, input the gross rent, and the 30% standard deduction on rental income will be auto-calculated. Municipal taxes paid can also be deducted. Remember, under the new regime, you cannot claim interest on a home loan for a self-occupied property.
  • Income from Business/Profession (Presumptive Income): This is the core of ITR 4.
    • For Section 44AD (Businesses): You’ll enter your total turnover/gross receipts. The system will then ask you to declare profit as a percentage of this turnover.
      • 6% for digital receipts (online transfers, UPI, etc.).
      • 8% for cash receipts.
      • Important: If your actual profit is lower than 6% or 8%, and your total income is above the basic exemption, you might need to maintain books of accounts and file ITR 3, as ITR 4’s presumptive scheme requires you to declare at least this much.
    • For Section 44AE (Goods Carriages): You’ll declare income per vehicle per month for different types of vehicles.
    • For Section 44ADA (Professionals): You’ll declare 50% of your gross professional receipts as profit.
    • Remember: When you choose presumptive income, you generally don’t claim individual business expenses like rent, utilities, staff salaries, etc. The presumptive percentage covers all that.
  • Income from Other Sources: Verify pre-filled interest income (savings, FDs, etc.) from your AIS/TIS. Add any other income like dividends or family pension (which has its own allowed deduction of 33.33% of pension or ₹25,000, whichever is lower, even in the new regime). Report any exempt income here too.
• Click “Confirm.”

Step 7: Total Deductions – A Very Limited List in the New Regime

• Since you’ve chosen the new tax regime, most of the popular Chapter VI-A deductions (like 80C for investments, 80D for health insurance, 80G for donations, etc.) will be greyed out or disabled.
• The few deductions you might still see and can claim are:
  • Section 80CCD(2): Your employer’s contribution to NPS (if you’re also a salaried individual).
  • Section 80CCH: Contributions to the Agniveer Corpus Fund (if applicable).
• Carefully enter any applicable deductions.
• Click “Confirm.”

Step 8: Tax Paid – Cross-Checking Your Credits

• This section will show you what taxes have already been paid on your behalf or by you.
• TDS (Tax Deducted at Source): Verify these details against your Form 26AS and AIS. This includes TDS on professional fees, interest income, or salary. Ensure the amounts and the TANs of the deductors are correct.
• TCS (Tax Collected at Source): If applicable, verify these details.
• Advance Tax & Self-Assessment Tax: Enter any advance tax payments you made throughout the year, and any self-assessment tax paid before filing.
• Click “Confirm.”

Step 9: Total Tax Liability – The Final Calculation (and Your Refund/Payment!)

• The system will automatically calculate your tax based on your declared income and the new tax regime’s slab rates:
  • New Tax Regime Slabs (FY 2024-25 / AY 2025-26):
    • Up to ₹3,00,000: Nil
    • ₹3,00,001 to ₹7,00,000: 5% (Remember that Section 87A rebate can make this zero if your taxable income is up to ₹7 Lakhs!)
    • ₹7,00,001 to ₹10,00,000: 10%
    • ₹10,00,001 to ₹12,00,000: 15%
    • ₹12,00,001 to ₹15,00,000: 20%
    • Above ₹15,00,000: 30%
  • A 4% Health and Education Cess will be added to your calculated tax.
• Review the entire tax computation summary.
• Tax Payable: If you owe more tax, you’ll see an option to “Pay Now.” It’s generally best to pay any outstanding tax before you submit the return.
• Refund: If you’re due a refund, the amount will be displayed. Just double-check your bank account details from Step 5!
• Click “Confirm.”

Step 10: One Last Look – Preview and Submit!

• Click “Preview Return.” This is your final chance to spot any mistakes. Go through every single figure, every detail.
• Once you’re absolutely sure everything is accurate, go ahead and click “Submit.”

Step 11: E-Verify Your Return – Don’t Forget This Crucial Step!

• You’re almost there! But filing isn’t done until you e-verify. You have 30 days from the date you submit to do this. If you miss it, your return will be considered invalid.
• You’ll have several options to e-Verify:
  • Aadhaar OTP: This is usually the quickest and easiest way. An OTP will land on the mobile number linked to your Aadhaar.
  • Net Banking: Log in through your bank’s net banking portal.
  • Demat Account: Generate an EVC (Electronic Verification Code) via your Demat account.
  • Bank ATM (Offline): Some banks allow you to generate an EVC at their ATMs.
  • Digital Signature Certificate (DSC): More common for businesses, but an option.
• Pick the method that works best for you and complete the verification. Once successful, an acknowledgment (ITR-V) will pop into your registered email inbox.

And there you have it! You’ve successfully filed your ITR 4 under the New Tax Regime for FY 2024-25. While the presumptive scheme and the new regime simplify things by cutting down on expense tracking and deductions, it’s always smart to keep all your financial records organized.

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Contact via mobile +918588900433 or email csniraassociates@gmail.com for getting your ITR filed professionally.