What is ITR 4 - Income Tax Return filing

ITR 4 which is popularly known as ITR 4 Sugam is to be used by an individual or HUF, or a Firm (other than LLP) which is a resident, whose total income for the assessment year 2020-21 does not exceed Rs.50 lakh and who has income under the following heads:-

• Income from business where such income is computed on presumptive basis under Section 44AD (i.e. Gross Turnover upto Rs. 2 crore) or Section 44AE (income from goods carriage upto ten vehicles);
• Income from Profession where such income is computed on presumptive basis under Section 44ADA (i.e. Gross receipt upto Rs. 50 lakh);
• Income from Salary/ Pension;
• Income from One House Property;
• Interest income and / or income from family pension taxable under Other Sources.

This Return Form should not be used by a person who :

• is a Director in a company;
• has held any unlisted equity shares at any time during the previous year;
• has any asset (including financial interest in any entity) located outside India;
• has signing authority in any account located outside India;
• has income from any source outside India.

This return form also cannot be used by a person who has any income of the following nature during the previous year:- 

• Profits and gains from business and professions which is not required to be computed u/s 44AD, 44ADA or 44AE, such as income from speculative business, agency business, commission or brokerage income etc.;
• Capital gains;
• Income from more than one house property;
• Income under the head other sources which is of following nature:-
  • (i) winnings from lottery;
  • (ii) activity of owning and maintaining race horses;
  • (iii) income taxable at special rates under section 115BBDA or section 115BBE;
• Income to be apportioned in accordance with provisions of section 5A;
• Agricultural income in excess of Rs. 5,000.

It may be pertinent to note that Form ITR-4 (Sugam) is a simplified return form to be used by an assessee, at his option, if he 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 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 return forms viz. ITR-3 or ITR-5, as applicable, should be used and not this Form.