Itr 4s

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2015 Dear Sir,
One of the assessee has net profit Rs. 165000/- u/s 44ad and besides this he has rental income of 13500/- per month by leting a shop for ATM. In this regard I have following queries -
1. Whether he can use itr 4S to show his business income and rental income as well.
2. What % of deduction is allowed out of rental income as annual maintenence?

Please clarify.
Thanks and Regards.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

26 June 2015 30% deduction is allowed as repairs u/s 24(b).

Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2015 Whether itr 4S can be used?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

02 August 2024 ### Queries Regarding ITR-4S and Rental Income

**1. **Eligibility to Use ITR-4S:**

**ITR-4S (Sugam)** is specifically designed for taxpayers who are:
- **Engaged in a business** and opt for the presumptive taxation scheme under Section 44AD, 44AE, or 44AF.
- **Have income from other sources**, but only if it is limited to certain types of income and doesn’t involve complex calculations or additional schedules.

However, **rental income** from letting out a shop (or any other property) does not fall under the presumptive taxation scheme. Rental income is considered under **Income from House Property**, and its reporting requires a more detailed approach than ITR-4S offers.

**Therefore:**
- **ITR-4S** cannot be used if the assessee has rental income, as ITR-4S does not accommodate detailed reporting for rental income or related deductions.
- **ITR-4** should be used to report business income under Section 44AD and also include the rental income from letting out the shop.

**2. **Deduction from Rental Income:**

For **rental income** from letting out property, the following deductions are typically allowed under the **Income from House Property** head:

- **Standard Deduction:**
- A **standard deduction** of **30%** of the **net annual value** (i.e., the annual rent received minus municipal taxes paid) is allowed.

- **Municipal Taxes:**
- Any municipal taxes paid on the property can be deducted from the rental income to arrive at the net annual value.

### **Steps for Filing ITR-4:**

1. **Report Business Income:**
- Enter the income under the presumptive taxation scheme (Section 44AD) in the appropriate section of ITR-4.

2. **Report Rental Income:**
- For rental income, use the section provided in ITR-4 for **Income from House Property**.
- Deduct municipal taxes paid and apply the standard deduction of 30% to the net annual value.

**Summary:**

- **ITR-4S** is not suitable if you need to report rental income. You should use **ITR-4** instead.
- **Standard Deduction** of 30% on the net annual value is allowed for rental income, and municipal taxes can also be deducted.

Ensure that you accurately fill out ITR-4 to include both the presumptive business income and the rental income, applying the appropriate deductions to report your income correctly. If you need further assistance, consulting a tax professional can ensure compliance and accuracy in your tax filings.

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