KIYOSH (TAX CONSULTANT) 22 May 2011
A person doing trading activity having turnover around 20 Lacs. He is maintaing books of account & income is above 8% of turnover.
Q : Should he use ITR 4 OR ITR 4S ?
Thanks in advance
Devendra (Chartered Accountant) 22 May 2011
THE ASSESSEE CAN FILE HIS ITR IN ITR-4S BY SHOWING PROFIT @ 8% ON SALES. IF THE ASSESSEE WANTS TO SHOW A PROFIT LESS THAN 8% OF SALES, THEN HE WILL HAVE TO GET HIS ACCOUNTS AUDITED FROM A CHARTERED ACCOUNTANT.
Naina (CA Student) 22 May 2011
I think ITR - 4 should be used in this case because the assessee is maintaining books of accounts. ITR - 4S is to be filed where no books of accounts are being maintained and income is presumed to be 8% or more.
Vivek Mehta (CA, DISA,CS, MBA) (I am in Practice and also giving understanding and guidance to the Students of CA Final and IPCC for various subjects esp for Direct Tax.) 22 May 2011
ITR 4S is required if the assessee is declaring the income on presemptive basis. In case of declaring higher income no need of audit and return can be filled and shall be filled in ITR 4 only
Saurabh Aggarwal (Chartered Accountant) 23 May 2011
In your case since the assessee is a trader ,the assessee has two options.
Case 1. He may Complute Income on Presumptive Basis u/s 44AD for A.Y. 2011-12
In this case he may take income = minimum 8% of total turnover. If he takes income less than 8% he has to get accounts audited u/s 44AB by a CA. He has to file ITR4S if compute income on presumptive basis.
Case 2. He may maintain proper books of Accounts.
In this case his income shall be actual book profit but in case it falls below 8% of turnover, again he has to get accounts audited u/s 44AB. He has to file ITR 4 in this case.
You may now select the option as per your suitability,
Thanks & Regards