Income Tax Return: An Overview
 

An Income tax return (ITR) is a form used to file information about your income and tax to the Income Tax Department. The tax liability of a taxpayer is calculated based on his or her income. In case the return shows that excess tax has been paid during a year, then the individual will be eligible to receive an income tax refund from the Income Tax Department.

As per the income tax laws, the return must be filed every year by an individual or business that earns any income during a financial year. The income could be in the form of a salary, business profits, income from house property or earned through dividends, capital gains, interests or other sources.

Tax returns have to be filed by an individual or a business before a specified date. If a taxpayer fails to abide by the deadline, he or she has to pay a penalty.

ITR-4 Form

ITR-4 Form is the Income Tax Return form for taxpayers who opt for a presumptive income scheme under Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act.

However, if the turnover of the business mentioned above exceeds Rs 2 crores, the taxpayer will have to file ITR-3.

Who is required to file ITR-4?

ITR 4 is to be filed by the individuals/HUF/ Partnership firm whose total income of AY 2020-21 includes as below:

Business income under section 44AD or 44AE 
Income from profession calculated under section 44ADA 
Salary/pension having income up to Rs 50 lakh 
Income from One House Property having income up to Rs 50 lakh (excluding the brought forward loss or loss to be carried forward cases under this head) 
Income from Other Sources having income up to Rs 50 lakh (Excluding winning from lottery and income from horse races). 
Note: Freelancers engaged in the above profession can also opt for this scheme if their gross receipts don’t exceed Rs 50 lakhs.

Who is not required to file ITR-4 for AY 2022-23? 
 

An individual having income from salary, house property or other sources above Rs 50 lakh cannot use this form. 
An individual who is either a director in a company or has invested in unlisted equity shares cannot use this form. 
An individual, HUF or partnership firm whose books of accounts should be audited under the Income Tax Act, 1961. 
Resident but not ordinarily residents  (RNOR) 
Non-residents 
In case an individual is either a director in a company or has invested in unlisted equity shares  
Deferred tax on ESOP received from employer being an eligible start‐up 
Having an agricultural income of more than Rs 5,000

Documents Required

Bank Statement

Pan Card

Aadhaar Card

Penalty for Late Filing Income Tax Return

Taxpayers who do not file their income tax return on time are subject to penalties and charged interest on the late payment of income tax. Also, the penalty for late filing income tax returns on time has been increased recently. The penalty for late filing income tax return is now as follows:

Late Filing between 1st August and 31st December - Rs.5000  
Late Filing After 31st December - Rs.10,000  
Penalty if taxable income is less than Rs.5 lakhs - Rs.1000