Income Tax Return Form 4 Filing
Introduction
Income Tax Return Form 4 (ITR-4) is a form that is used to file income tax returns by individuals and Hindu Undivided Families (HUFs) who have income from a proprietary business or profession. The form is also used by taxpayers who have opted for the presumptive taxation scheme under Section 44AD, Section 44ADA, or Section 44AE of the Income Tax Act, 1961.
In this article, we will discuss the various aspects of ITR-4 filing, including eligibility, due dates, benefits, and steps to file ITR-4.
Eligibility for ITR-4 Filing
ITR-4 is applicable for individuals and HUFs who have income from a proprietary business or profession. The following taxpayers are eligible to file ITR-4:
Sole proprietors: Individuals who run their own business are considered sole proprietors. They can file ITR-4 if they have income from their business.
Professionals: Individuals who provide professional services such as doctors, lawyers, engineers, and architects can file ITR-4 if they have income from their profession.
Presumptive taxpayers: Taxpayers who have opted for the presumptive taxation scheme under Section 44AD, Section 44ADA, or Section 44AE of the Income Tax Act, 1961, can file ITR-4.
Due Dates for ITR-4 Filing
The due date for filing ITR-4 for the assessment year 2022-23 is July 31, 2023. However, the due date may vary for taxpayers who are required to get their accounts audited under Section 44AB of the Income Tax Act, 1961.
Benefits of ITR-4 Filing
Filing ITR-4 has several benefits for individuals and HUFs who have income from a proprietary business or profession. Let's take a look at some of the benefits:
Compliance with tax laws: Filing ITR-4 is mandatory for individuals and HUFs who have income from a proprietary business or profession. Filing your income tax return helps you comply with tax laws and avoid any penalties or legal issues.
Claiming deductions: Filing ITR-4 allows you to claim deductions on various expenses incurred while earning your business or profession income, such as rent, salaries, and depreciation of assets. This can help you reduce your taxable income and lower your tax liability.
Facilitates loan and credit applications: Many financial institutions require individuals and HUFs to provide their income tax returns as proof of income while applying for loans or credit. Filing ITR-4 can help you establish your income and facilitate loan and credit applications.
Avoiding scrutiny: Filing your income tax return on time can help you avoid scrutiny by the income tax department. Non-filing or late filing of income tax returns can attract penalties and scrutiny by the tax authorities.
Ease of filing: Filing ITR-4 is a simple and straightforward process. You can file your return online through the Income Tax Department's e-filing portal or by using other tax-filing software.
Steps to File ITR-4
Here are the step-by-step instructions on how to file ITR-4:
Step 1: Visit the Income Tax Department's e-filing portal
To file your ITR-4 online, you need to visit the Income Tax Department's e-filing portal at https://www.incometax.gov.in/iec/foportal/ Log in to your account using your PAN number and password.
Step 2: Download ITR-4 Form
Download the ITR-4 form and extract the ZIP file. Open the Excel file and enable the macros if prompted.
Step 3: Fill in the required details
Fill in the required details in the ITR-4 form, such as personal details, contact information, and income details.
Step 4: Calculate your tax liability
Calculate your tax liability for the financial year. If you have opted for the presumptive taxation scheme, the tax liability will be calculated automatically based on the presumptive income.
Step 5: Claim deductions
Claim deductions on various expenses incurred while earning your business or profession income, such as rent, salaries, and depreciation of assets. Ensure that you have the necessary documents to support your claims.
Step 6: Validate and generate the XML file
Validate the details entered in the ITR-4 form and generate the XML file. Save the XML file to your computer.
Step 7: Upload the XML file
Upload the XML file to the Income Tax Department's e-filing portal. You can do this by selecting the "Upload Return" option and choosing the XML file from your computer.
Step 8: Verify your return
Verify your return using one of the following methods:
- Digital Signature Certificate (DSC)
- Aadhaar OTP
- Net Banking
- Bank Account Number
- Demat Account Number
Once your return is verified, you will receive an acknowledgement receipt. Save the acknowledgement receipt for future reference.
Penalties for Non-Filing of ITR Form 4
If an individual or a Hindu Undivided Family (HUF) fails to file their Income Tax Return (ITR) for Form 4 within the due date, they may be subject to various penalties and consequences as per the Income Tax Act, 1961. Here are some of the penalties for non-filing or late filing of ITR-4:
Penalty for Late Filing: If an individual or HUF fails to file the ITR-4 before the due date, a late fee of Rs. 5,000 may be levied. However, if the return is filed after the due date but before December 31 of the relevant assessment year, the late fee will be Rs. 1,000. In case the total income of the taxpayer does not exceed Rs. 5 lakh, the maximum penalty for late filing will be Rs. 1,000.
Interest on Tax Due: If the individual or HUF has any tax payable for the financial year and fails to pay it within the due date, they will be charged an interest of 1% per month or part thereof until the date of payment of tax.
Prosecution: If the individual or HUF fails to file their ITR-4 for a continuous period of two years or more, they may be liable for prosecution under the Income Tax Act.
Disallowance of Losses: If the taxpayer fails to file the ITR-4 within the due date, they may not be allowed to carry forward losses incurred during the financial year to the next financial year.
Delay in Refund: If the individual or HUF is eligible for a refund of taxes paid and fails to file the ITR-4 within the due date, they may experience a delay in receiving the refund amount.
Therefore, it is advisable to file the ITR-4 within the due date to avoid any penalties or legal issues. Additionally, filing your ITR on time also allows you to claim deductions and benefits under the Income Tax Act, which can help in reducing your tax liability.
Conclusion
Filing ITR-4 is a mandatory requirement for individuals and HUFs who have income from a proprietary business or profession. By following the above steps, you can easily file your ITR-4 online and avoid any penalties or legal issues. Remember to file your return before the due date to comply with tax laws and enjoy the various benefits of filing your income tax return.
