ITR Form 4S - Sugam

What is ITR-4S (Sugam)?

ITR-4S or SUGAM is an Income Tax Return form for those taxpayers being a resident Individual or a HUF who opts for presumptive taxation scheme under section 44AD and section 44AE of the Income Tax Act, 1961.

Who can file ITR-4S?

ITR-4S can be used by following taxpayers:

  • Taxpayers who are opting for presumptive taxation scheme under section 44AD & section 44AE for computation of business income; or
  • Taxpayers who have income from salary or pension; or
  • Taxpayers who have income from one house property (Except where loss from house property is brought forward from previous year); or
  • Taxpayers who have income from other sources (Except for winning from lottery and income from race horses); or
  • Taxpayers who have clubbed income of spouse, or minor child can also file ITR-4S provided the clubbed income falls into the above income source.

It is to be noted that the income computed above in each case shall be after giving full effect to every loss, allowance, depreciation and deduction allowed as per Income Tax Act.

Who cannot file ITR-4S?

ITR-4S is not applicable in following cases:

  • Taxpayers who are not opting for presumptive taxation scheme under section 44AD and 44AE are not eligible to file ITR-4S.
  • Taxpayers who have income from more than one house property.
  • Taxpayers who have capital gains not exempt from tax.
  • Taxpayers who have agricultural income in excess of Rs. 5000.
  • Taxpayers who are engaged in speculative business.
  • ITR-4S is not applicable where losses are to be carried forward.
  • Taxpayers having income from winning from lottery or from race horses.
  • Assessees having income from agency business or commission or brokerage.
  • Taxpayers who have income from any source outside India.
  • Taxpayers who have claimed tax relief under section 90, 90A or 91.
  • Taxpayers who have claimed exemption in respect of any income under section 10, 10A and 10AA, etc.
  • ITR-4S is not applicable in case of professionals like lawyers, medical practitioners, chartered accountants etc.

What is Presumptive Taxation?

Presumptive Taxation is basically a simple tax mechanism rolled out by Income Tax Department which gives taxpayers a relief from maintaining books of account & getting their accounts audited. Under presumptive mechanism, taxpayers declare their income at a prescribed rate of percentage on net basis i.e. after considering all expenses. There are currently two types of presumptive taxation mechanism available which are:

  • section 44AD and
  • section 44AE

Section 44AD :

Under Presumptive taxation scheme of Section 44AD, if a taxpayer declares and claims the net income of the eligible business to be 8% or more of the turnover, then he is neither required to maintain his books of account under section 44AA nor to get his accounts audited under section 44AB, provided he satisfies the following conditions:

  • An assessee is engaged in an eligible business; and
  • Such business has a turnover of Rs. 1 crore or less; and
  • The business is other than the business of plying, hiring or leasing of goods carriages; and
  • All the expenses and depreciation are deemed to have been availed for the computation of the net profit.

However, where an assessee claims and declares the income to be less than 8% of gross turnover, he shall be liable for the maintenance and audit of the books of accounts of such eligible business.

Section 44AE :

This presumptive taxation under scheme Section 44AE is for

  • an assessee engaged in business of plying, hiring or leasing of goods carriages and
  • is not owning more than 10 goods vehicle at any time during the year.

As per presumptive taxation scheme under section 44AE, the Income shall be equal to Rs. 7500 per month or part of month during which the goods vehicle is owned by the assessee or amount actually earned from such vehicle whichever is higher.

However, a person can declare his income at a lower rate (i.e. at less than Rs. 7,500 per goods vehicle per month) provided, he maintains the books of accounts and gets his accounts audited.

Whether section 44AA and section 44AB are applicable to ITR-4S users?

Those taxpayers who have opted for presumptive taxation scheme under section 44AD and 44AE need not to comply with provisions of section 44AA (i.e. maintaining account books) and section 44AB (i.e. getting accounts audited).

Documents needed for e-filing Income Tax Return May 1, 2015

New Income Tax Return Form ITR 2A Febuary 6, 2016



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