ITR-4 is the Income Tax Return form designed for individuals, Hindu Undivided Families (HUFs), and firms (excluding Limited Liability Partnerships or LLPs) who choose to utilize the presumptive income scheme as per Sections 44AD, 44ADA, and 44AE of the Income Tax Act.

The presumptive taxation scheme is designed to simplify tax compliance for certain individuals and businesses.

Under Section 44AA of the Income Tax Act, individuals and businesses engaged in specific activities are typically required to maintain detailed accounting records. However, Sections 44AD, 44ADA, and 44AE offer relief to small taxpayers by allowing them to estimate their Income at prescribed rates, reducing the burden of maintaining extensive financial records. Here's a breakdown of these schemes for users of ITR-4:

Section 44AD

This scheme allows Resident Individuals, Resident Hindu Undivided Families (HUFs), and Resident Partnership Firms (excluding Limited Liability Partnerships) engaged in certain businesses to calculate their Income on an estimated basis, provided they meet specific conditions.

Section 44ADA

Resident individuals in India who are professionals in fields specified under Section 44AA(1) can use this scheme to estimate their professional Income, subject to certain conditions.

Section 44AE

This scheme is applicable to individuals, HUFs, Firms (excluding Limited Liability Partnerships), and other residents or non-residents engaged in the business of plying, leasing, or hiring goods carriages. They can estimate their Income under this scheme, provided they own not more than ten goods carriages during the previous year.

Eligibility Criteria for Filing SUGAM (ITR-4) Form

To qualify for using the ITR-4 SUGAM form, the taxpayer must meet the following criteria for the assessment year:

Total Income: The total Income should not exceed Rs. 50 lakh.

The Income should be derived from any of the following sources:

• Income from Salary or Income from Pension.
• Income from One House Property.
• Interest income and/or Income from family pension taxable under Other Sources.
• Income from a business, which is computed on a presumptive basis (Gross Turnover up to Rs. 2 crores).
• Income from a business, computed on a presumptive basis (Income from goods carriage up to ten vehicles).
• Income from a profession, computed on a presumptive basis under Section 44ADA (Gross receipt up to Rs. 50 lakh).

• PAN (Permanent Account Number)
• Aadhaar Card
• Bank account details (account number and IFSC code)
• Other Optional Documents