ITR 4 Form – FY 2020-21 / AY 2021-22

ITR 4 Form – FY 2020-21 / AY 2021-22

ITR 4 Form is the Income Tax Return form for the taxpayers who opt for a presumptive income scheme under Section 44AD, Section 44ADA, and Section 44AE of the Income Tax Act. However, if the turnover of the business mentioned above exceeds Rs 2 crores, the taxpayer will have to file ITR-3. Income Tax Return (ITR) 4 Form – FY 2020-21 / AY 2021-22.

Assessment Year for ITR 4 Form – FY 2020-21 / AY 2021-22

This Return Form is applicable for the assessment year 2021‐22 only, i.e., it relates to income earned in Financial Year 2020‐21.

Who is Eligible to File ITR 4 Form – FY 2020-21 / AY 2021-22?

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

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

Checklist of information/documents for filing ITR-4

Part 1: Essential Documents

Here is a list of documents that are most essential to file ITR-4:

• PAN (Permanent Account Number)
• Bank account details
• TDS certificates
• Counterfoils of taxes paid
• Details of original return if filing revised return
• Details of notice if filing in response to the notice
• Electricity bill (In case it exceeds ₹1 Lakh)
• Travel expenses (In case it exceeds ₹2 Lakh)
• Deposits in Bank (₹1 Crore or above)

Part 2: Income-specific Documents

Based on your type of income, you’ll need the following documents:

Salary income

• Form-16/ Salary slips received from your employer
• Pension statement/passbook.

House/Property Income

• Address of the property
• Co­-owner details in case the property is co­owned
• In case of house/property — loan ­ Interest certificates/repayment certificate from bank
• In case of let out property — Rent agreement

Business / Profession

• Profit & Loss statement
• Balance Sheet
• Supporting documents for expenses incurred
• Bank account statement/Passbook
• Cash register
• Any other documents required to maintain the books of accounts of business & profession

Other sources

• Savings/current account statements/Passbook
• Interest certificates for deposits/bonds/NSC
• PPF account statement/Passbook
• Dividend warrants/counterfoils
• Rent agreement in case of let out machinery
• Details about receipts of any other incomes

If you’re eligible for any Tax Breaks, you may need to acquire the relevant documents from the list:

• PPF account statement/Passbook
• Fixed deposit certificates/statements
• Mutual fund NAV statements
• ELSS/ULIP/NSC investment details
• Life insurance premium receipts
• Medical insurance premium receipts
• Preventive health checkup details
• Pension fund/ National pension scheme statement
• House/property loan interest certificate/repayment statement
• Education loan interest certificate/repayment statement
• Tuition fees receipts
• Donation receipts
• Certificate from specified medical authorities in case of disability
• Receipts/proof of any other tax saving investment/contributions

Fundamental changes (as compared to ITR for AY 2020‐21)

• Option to avail benefit of new tax regime u/s 115BAC is provided in ITR‐4. Form‐10IE filing is mandatory to avail benefit of new tax regime and should be filed within the due date mentioned as per section 139(1).
• Resident Individual having Income‐Tax deferred on ESOP is restricted to file ITR‐4.
• The quarterly breakup of dividend income to be provided.
• Schedule DI is removed.

Obligation to file a return     

• Any individual or HUF opting for new tax regime u/s 115BAC has to mandatorily file Form 10‐IE before due date of filing of return u/s 139(1).
• Form 10‐IE once filed cannot be withdrawn during the year.
• After filing Form 10‐IE, an original return or revised return is required to be filed mandatorily to avail the benefit of new tax slab u/s 115BAC and Acknowledgement no. & Date of filing Form 10IE are mandatory fields in ITR‐4.
• If Form 10‐IE is filed within the due date then even if the return is filed after the due date, the benefit of 115BAC will be allowed.

What is the period covered during FY 2020-21 / AY 20201-22?

FY 2020-21 is the financial year 2020-21 starting from April 1, 2020, ending on March 31, 2021. AY 2021-22 is the assessment year 2021-22, relevant to the financial year 2020-21 (also called the previous year 2020-21). Income Tax Return (ITR) 4 Form – FY 2020-21 / AY 2021-22.

Who should not file ITR-4?

1. 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; or
• has income from any source outside India.
• has deferred tax on ESOP received from employer being an eligible start‐up.

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

(a)    Profits and gains from business and professions which is not required to be computed u/s 44AD, 44ADA or 44AE, such as income from a speculative business, agency business, commission or brokerage income etc.;

(b) Capital gains;

(c) Income from more than one house property;

(d) Income under the head other sources which is of following nature: ‐

• winnings from lottery;
• the activity of owning and maintaining race horses;
• income taxable at special rates under section 115BBE;

(e) Income to be apportioned in accordance with provisions of section 5A; or Agricultural income in excess of ₹5,000.

1. Further, this return form also cannot be used by a person who has any claims of loss/deductions/relief/tax credit etc. of the following nature: ‐

• any brought forward loss or loss to be carried forward under any head of income;
• loss under the head ‘Income from other sources;
• any claim of relief under section 90, 90A or section 91;
• any claim of deduction under section 57, other than a deduction under clause (iia) thereof (relating to family pension); or
• any claim of credit of tax deducted at source in the hands of any other person.

Who should mandatorily file Income Tax returns?

Any Individual whose total income before allowing deductions under chapter VI-A of the Income Tax exceeds the basic exemption limit should mandatorily file the income tax return.

The basic exemption limit for FY 2020-21 / AY 2021-22 is as follows:

• The individual below 60 years of age is Rs 2.50 Lakhs
• Resident senior citizens who are 60 years and above but below the age of 80 years is Rs 3.00 Lakhs
• Resident super senior citizens who are above 80 years of age is Rs 5.00 Lakhs
• The Finance Act (No 2) of 2019 has inserted Seventh Proviso to Section 139(1) of the Income Tax Act to make it mandatory to file an income tax return once the expenditure/transaction amount exceeds the prescribed threshold.
• The total Deposit in the current account is Rs. 1 crore or more
• Foreign Travel expenditure of Rs 2 Lakh or more.
• Amount spent for more than Rs 1 Lakh on the consumption of electricity.
• Any other conditions prescribed.

FAQ’S

Can I file ITR 4 offline also?

Yes, you can file offline ITR 4 only if: a) Individual is of 80 years or more in age b) The income of individual is less than Rs. 5 lakh and who do not have to claim a refund in the income tax return.

If I am opting presumptive scheme so can I claim a deduction of other expenditures and depreciation?

No, if a person is paying tax @ 8% as per section 44AD then he cannot claim depreciation or any other expenditure.

Is a Balance Sheet mandatory in ITR 4 filing?

In the case of ITR 4, it is not necessary to disclose the particulars of the balance sheet. Income Tax Return (ITR) 4 Form – FY 2020-21 / AY 2021-22.