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Difference Between ITR 4S or SUGAM and ITR 4

Prashant Gupta 
on 02 July 2015


Many Tax payers who are business owners or are professionals remain unsure about whether they need to file their Income Tax Return using form ITR 4 or ITR-4S (or SUGAM). So, here is mentioned information to understand the applicability of ITR 4 & ITR 4S.

First, let's understand ITR-4S (or SUGAM)

ITR-4S basically is a special case of ITR, and applies to businesses, individuals, and HUFs showing their income on presumptive basis and at the same time have annual turnover not more than Rs. 1 crore and own not more than one house property.

Apart from this, in below mentioned cases, the ITR-4S cannot be filed.

• Income from commission & brokerage

• Income from agency business

• Income from professions that include legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, film artist, company secretary, information technology, authorized representative. Authorized representative means that the person is representing a tribunal or authority under law for a fee or remuneration. Also, people involved in film production such as actor, producer, director, cameraman, music director, art director, dance director, singer, editor, lyricist, story writer, screenplay writer, dialogue writer, dress designer etc.

• Have speculative income such as winnings from lotteries, horse races, etc.

• Have agriculture income or have exempt income more than Rs. 5000

• Have capital gains

• Have losses to be carried forward

• Have asset/s outside the country or has financial interest in any foreign entity

• Have income from source outside India

• Have claimed relief under sec 90 or 91

If we talk about presumptive method then in presumptive method the net income is estimated as 8% of gross receipts (see section 44AD of Income Tax Act) or Rs. 7500 per month per vehicle in case the tax payer involved in plying, leasing or hiring trucks (see section 44AE of Income Tax Act). As I mentioned at the beginning that ITR-4S is a special case of ITR and those who opt for ITR-4S are not required to maintain accounting records.

A 3 page Income Tax Return, ITR-4S is a very simple return and can easily be filed. Following are the information which is required in ITR-4S return.

• Gross turnover or Gross Receipts

• Total Sundry Debtors

• Total Presumptive Income

• Total Sundry Creditors

• Total Stock-in-trade

• Cash Balance

Primarily, in ITR-4S one needs to mention only annual turnover and gross profit while in ITR-4 one is required to report Profit & Loss and Balance Sheet.

Now, let's understand ITR-4

Broadly speaking, any individual who runs a business or is a professional can file his Income Tax Return using ITR-4, and therefore companies, trusts and partnership firms are not eligible for ITR-4 filing. All types of businesses can file ITR-4. Taxpayers like shopkeeper, construction contractor, tutor, retailer, wholesaler, insurance agent, fashion designer, etc. all are eligible to file ITR-4. There is no minimum income requirement to file ITR-4.

A detailed ITR form, ITR-4 asks following details of 'Income from business' head.

PART A-GEN: Enter here the general information and nature of business

PART A-BS: Enter here the Balance Sheet as of March 31, 2015 of the Business or profession

PART A- P&L: Enter here the Profit & Loss details of financial year 2014-15

PART A- OI: Enter here other information (optional in case, the audit is not mandatory)

PART A- QD: Enter here Quantitative details (optional in case, the audit is not mandatory)

PART B: Enter here the outline of the total income and tax computation

Apart from this, there are around 35 schedules in ITR-4 wherein one will have to enter the relevant information.

Let's further understand the difference between ITR-4 an ITR-4S with some examples.

Example 1: Karan has a cloth retail shop and has opted for presumptive income scheme. So, Karan can either file his ITR using ITR-4 or ITR-4S (provided, his gross turnover is less than Rs. 1 crore.).

Example 2: Poonam is an interior decorator and thus she cannot file ITR using ITR-4S as her profession of Interior Designing is not eligible for ITR-4S. She will have to file ITR-4.

Example 3: Sonia had opted for presumptive income for FY 2013-14. She runs a wholesale business. Her turnover for FY 2014-15 was Rs. 1.20 crore. Now, as Sonia's annual turnover is more than Rs. 1 crore, she cannot file ITR-4S. She will have to file ITR-4.

Example 4: Deepak is an insurance agent and his income during financial year 2014-15 was Rs. 18 lacs. Now, as Deepak's income is basically income from commission which is not eligible for ITR-4S, so he will have to file ITR-4.

Example 5: Ravi is a cardiac surgeon and his income during financial year 2014-15 lacs. Now, although Deepak's annual turnover is less than Rs. 1 crore, still he cannot file ITR-4S as his profession which is Doctor is not eligible for ITR-4S.

Hope, this clarifies the difference between ITR-4 and ITR-4S, and helps you to e-file your Income Tax Return with ease.

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