The Income Tax Department has notified different ITR forms on the basis of the nature of income & class of people, like ITR-1, ITR-2, ITR-3, etc., to file income tax returns. ITR-4 is an income tax return form that is used by taxpayers who are running a business or profession and have opted for the presumptive taxation scheme under Section 44AD, Section 44ADA, or Section 44AE of the Income Tax Act. However, if the turnover of the above-mentioned businesses exceeds Rs. 2 crores, the taxpayer will have to file ITR-3. Under this scheme, the taxpayer is not required to maintain detailed books of accounts and can declare income at a prescribed rate based on gross receipts. The applicable rates for different businesses and professions are provided in the Income Tax Act.

What is the Eligibility Criteria for Filing ITR-4?

(i). The taxpayer should be an individual, HUF, or partnership firm.

(ii).The taxpayer should be a resident of India.

(iii).The taxpayer should have income from business or profession.

(iv).The taxpayer should have opted for the presumptive taxation scheme under Section 44AD, Section 44ADA, or Section 44AE.

(v). The total income of the taxpayer should not exceed Rs. 50 lakh.

(vi).The taxpayer should not have income from more than one house property.

(a).The taxpayer should not have income from capital gains except from the sale of assets mentioned in Section 44AD(1).

(c).The taxpayer should not have any income from lottery, racehorses, legal gambling, or any other speculative business.