How to show Partner's salary & sole proprietor business income in ITR 4

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This discussion clarifies how to declare income from both a partnership firm and a sole proprietorship when filing your Income Tax Return (ITR). While salary and profit share from a partnership firm are typically assessed under the PGBP head and may require ITR 3, your sole proprietorship income can still benefit from the 44AD presumptive assessment scheme even when filing ITR 3.

Preeti

Preeti (Querist)
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08 September 2021 I have following incomes, please guide which ITR form to fill & how to avail 44AD benefit for sole trading income:
1.) Salary & profit share from partnership firm - 55 Lac
2.) Turnover of my Sole Proprietorship (all through electronic mode) - 40 Lac

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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08 September 2021 As Partner's salary is assessed under PGBP head, & being not eligible for presumptive assessment; ITR 3 is required to be filled.

Preeti

Preeti (Querist)
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11 September 2021 Thanks for reply.
But if I'll file ITR 3 then I will not be able to get 44AD benefit for sole proprietorship income, that means i'll have to forgo 44AD benefit bcz of my partnership income?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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11 September 2021 Not at all. You can declare sole prop. business income u/s. 44AD in ITR 3 also. While that from partnership firm is to be declared under normal business income, as it is not eligible for presumptive assessment.

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