ITR-4 Form for FY 2024-25 (AY 2024-25)

Major Changes in ITR-4 Form from AY 2025-26

1. LTCG Reporting in ITR-1: Taxpayers can now show Long Term Capital Gains under Section 112A (on listed equity shares or equity mutual funds) in the ITR-1 return, provided:

1. Total LTCG is less than Rs.1.25 lakh

1. No losses are being carried forward or brought forward under capital gains

1. This is good news for small investors, who previously had to use ITR-2 even to report negligible LTCG income.

2. Declaration of Tax Regime (Section 115BAC): The new tax regime will be the default for individuals from AY 2025-26 onwards. Taxpayers will have the option to opt out and choose the old regime each year.

1. If you opted out in AY 2024-25, you would have to confirm that decision in AY 2025-26.

1. If you are opting out for the first time, you must submit Form 10-IEA before the due date for filing your return and include an acknowledgement number in your return.

3. Section-wise Disclosure of Deductions: Deductions under Sections 80C to 80U will have to be selected from a drop-down list on the e-filing portal, and you will also have to specify the clause or sub-section related to the deduction - to ensure greater transparency.

4. Foreign Retirement Income (section 89A): New reporting fields will also be available to help taxpayers keep track and claim relief from tax for their retirement accounts held outside of India.

5. Aadhaar Registration ID Not Allowed: A 12-digit Aadhaar number is only possible. The previous 28-digit Aadhaar Registration ID format has been discontinued.

6. Addition of TDS Schedule: A new column has been added to the TDS schedule to identify the section under which tax has been deducted at source. This is a better method to classify TDS entries.

Presumptive Taxation Scheme

Presumptive taxation allows small taxpayers, e.g. traders, professionals, transporters and others, to declare income at a specified percentage of their turnover, or receipts, typically no books of accounts are need to be maintained. The scheme was designed to ease compliance and simplify the tax return process for small taxpayers who may lack the necessary environment to keep sophisticated financial records.

Key Features of the Presumptive Taxation Scheme are:

1. No books of accounts are required.

1. The income is presummed at a fixed percentage of turnover receipts.

1. No additional deductions on business expenses are allowed.

1. All advance tax should be paid on or before March 15 each year.
2. It allows for greater digital adoption with a lower presumptive rate (i.e. 6% instead of 8%).

Sections under Presumptive Taxation Scheme

The different sections under presumptive taxation scheme are discussed below:  

Who is Not Eligible for the Presumptive Taxation Scheme under Section 44AD?

The purpose of Section 44AD is to provide relief to small taxpayers operating any type of business, with the exception of the following:

1. The business of leasing, hiring, and transporting goods carriages, as defined in sections 44AE.
2. Individuals receiving commission or brokerage payments.
3. Individuals running an agency business.
4. Any company whose annual gross receipts or turnover is more than Rs.2 crore.

Who can/cannot file ITR-4?

Who Can File ITR-4

ITR-4 Form must be submitted by people whose income is derived from the sources listed below:

1. Business Income as defined by Sections 44AD and 44AE
2. Professional income in accordance with Section 44ADA
3. Income from one house property up to Rs.50 lakh (excluding the loss that has been caused or that needs to be brought forward under this head)
4. Freelancers earning an income of less than Rs.50 lakh
5. Income from salary or pension of up to Rs.50 lakh
6. Up to Rs.50 lakh in income from other sources (excluding lottery and horse racing winnings)

Who is Not Eligible to File ITR-4

The following individuals do not have to file ITR-4:

1. Holds a position as a company director
2. Possesses property or financial stake in a company outside of India
3. Has earnings from sources outside of India
4. Any earnings from a business or occupation, such as commissions, brokerage fees, or income from a speculative venture, not required to be computed in compliance with sections 44AD, 44ADA, or 44AE.
5. Possesses any unlisted equity shares during the previous year
6. Gets capital gains
7. Possesses income from multiple residential properties
8. Possesses income that must be allocated in accordance with Section 5A's provisions
9. Loss that has been carried forward or caused under any income head
10. Has agricultural income of more than Rs.5,000
11. Possesses money from winnings at horse races, lotteries, or income taxed at a higher rate under Sections 115BBDA or 115BBE that is classified as coming from "other sources"
12. Possesses joint ownership in house property 
13. Has a claim for relief under Section 90, Section 90A, or Section 91
14. Has a tax credit claim that was deducted at source in the possession of another person
15. Has any claim for a deduction under Section 57, excluding a deduction for a family pension.

The table below clearly distinguishes between those eligible and not eligible to file ITR-4.:

Documents Required to File ITR-4 in FY 2023-24 (AY 2024-25)

To file ITR-4, you need to submit the following documents:

1. Aadhaar card
2. Bank statement
3. PAN card
4. Form 16
5. Form 16A
6. Form 26AS & AIS
7. Donation receipts
8. Housing Loan Interest Certificates
9. Insurance premium receipts
10. Rental agreement

How to File ITR-4 for FY 2024-25 (AY 2025-26)

Registered users have access to the pre-filling and filing of ITR-4 services on the e-Filing portal. Individual taxpayers, HUFs, and firms (not including LLPs) can use this service to submit their ITR-4 tax returns online through the e-Filing portal. Before submitting the form online, you must complete all six sections of the ITR-4. There is a preview page where you can check the accuracy of the information you have entered. These are the sections:

1. Personal Information
2. Gross Total Income
3. Disclosures and Exempt Income
4. Total Deductions
5. Taxes Paid
6. Total Tax Liability

Step 1: Personal Information - You must double-check the information that is automatically filled in from your e-Filing profile in the ITR's Personal Information section. Some of your personal information cannot be changed directly in the form. You can, however, visit your e-Filing profile to make the necessary modifications.

In your e-Filing profile, you can edit your contact information, filing type information, partner information (if applicable), bank information, and authorised representative.

Step 2: Gross Total Income - To verify the details of your income sources, such as your real estate holdings, business or profession, pension or pay, and other sources, you must go over the pre-filled information in the Gross Total Income section.

Step 3: Disclosures and Exempt Income - You must include information about your company's financial details, gross receipts reported for GST (optional), and exempt income in the Disclosures and Exempt Income section.

Step 4: Total Deductions - You must add and confirm any deductions that you wish to claim under Chapter VI-A of the Income Tax Act in the section labelled ‘Total Deductions.’

Step 5: Taxes Paid - You must confirm the taxes you paid in the previous year in this section. Included in the tax information are TDS from Salary and Other Income as reported by the Payer, Advance Tax, Self-Assessment Tax, and TCS.

Step 6: Total Tax Liability - You can view your income computation, tax computation, total tax, interest, and cess. You must verify your tax liability information according to the fields you had earlier filled out in the computation of tax section.

Structure of the ITR-4 Form

ITR 4 - Indian Income Tax Return for Individuals and HUFs having income from a proprietary business or profession for Assessment Year 2024-25 is as follows:

ITR 4 Instructions

The above sections will have to be addressed in the form. Please note the following:

1. Put '----NA----' to the schedule that is not applicable to you.
2. Put Nil if there is no figure to denote.
3. If you have to include a negative balance in the profit column, then put '-'sign before the figure.
4. Round off the figures to the nearest one rupee.
5. The total income or loss payable must be rounded off the nearest multiple of Rs.10.

Finally after filling out the Part A and B, verify the document.

Process to File and Submit ITR-4 Online for FY 2023-24 (AY 2024-25)

Step 1: Use your user ID and password to log in to the e-Filing portal.

Step 2: Under the ‘e-File’ section, go to ‘Income Tax Returns’ and click on ‘File Income Tax Return.’

Step 3: Click Continue after selecting the Assessment Year as 2023–24 and the Mode of Filing as online.

Step 4: If your income tax return has already been completed and is waiting to be submitted, click on 'Resume Filing.' Click on 'Start New Filing' if you want to start over and delete the previously saved return.

Step 5: Select Status if it applies to you and click on the ‘Continue’ button.

Step 6: Choose the appropriate Income Tax Return and click the ‘Proceed with ITR-4' option.

Step 7: Click 'Let's Get Started' after carefully reading the form's instructions and noting the list of required documents.

Step 8: Review your pre-filled information and make any necessary changes. At the conclusion of each section, enter any additional information if necessary and click on ‘Confirm.’

Step 9: Choose ‘Yes’ in ‘Have you ever opted for new tax regime in earlier years’ if you have previously chosen a new tax regime, otherwise, choose ‘No.’ If you chose ‘Yes,’ select the AY, enter the date that Form 10 IE was filed, and enter the Acknowledgement number.

Step 10: If you did not opt for the new tax regime in previous years, choose ‘No’ and then choose ‘Opting in now for the current year’ (if you want to), or choose ‘Not Opting.’

Step 11: You will notice that some deductions and allowances are unavailable if you choose the new tax regime. Click on ‘Proceed.’

Step 12: If you have business income, you must enter your Form 10IE Acknowledgement Number and the date you filed it in order to choose a new tax bracket.

Step 13: Fill in the various sections with information about your income and deductions and click on ‘Proceed.’

Step 14: Depending on the information you provided, you will get a summary of your tax computation.

Step 15: You will find the ‘Pay Now’ and ‘Pay Later’ options at the bottom of the page if the computation indicates that there is tax liability due.

Step 16: A Preview Return page will appear if there isn't any tax liability due or if there is a refund according to the tax computation.

Step 17: A success message is shown following a successful payment via the e-Filing portal. Click on the ‘Back to Return Filing’ option.

Step 18: Click on ‘Preview Return.’ Place, name, and other information will be automatically filled in on the page.

Step 19: Choose the declaration checkbox and click on the ‘Proceed to Preview’ option.

Step 20: Click on the ‘Proceed to Validation’ button.

Step 21: Now, Click on ‘Proceed to Verification’ after validation.

Step 22: Choose the option you prefer and click 'Continue' on the 'Complete your Verification' page.

Step 23: Choose the method for e-Verifying the return on the ‘e-Verify’ page, then click ‘Continue.’