1 week ago

Income Tax Department Clarifies ITR-3 And ITR-4 Selection

Income Tax Department explains how to choose between ITR-3 and ITR-4: Quick checklist for taxpayers · livemint.com

The Income Tax Department has explained how taxpayers can choose between two tax-return forms.

ITR-4 is for certain residents who use a simpler presumptive method to calculate business or professional income.

Their total income must generally be ₹50 lakh or less.

ITR-4 may also include salary, pension, some house-property income and certain other income.

People with foreign assets, unlisted shares, carried-forward losses or some special types of income cannot use ITR-4.

ITR-3 is generally for individuals and HUFs with business or professional income who do not qualify for ITR-4.

It also applies when total income exceeds ₹50 lakh or when the taxpayer engages in F&O trading.

Taxpayers filing non-audit returns should choose the correct form before the 31 August deadline.

Key facts

ITR-4 eligibility: Resident individuals, HUFs and resident firms other than LLPs with eligible presumptive business or professional income.
ITR-4 income limit: Total income must be up to ₹50 lakh.
Presumptive-tax sections: Sections 44AD, 44ADA and 44AE of the Income Tax Act, 1961.
Capital-gains limit: ITR-4 cannot be used when specified short-term or long-term capital gains under Section 112A exceed ₹1.25 lakh.
ITR-4 exclusions: The form is unavailable in cases including foreign assets or income, unlisted equity shares, carried-forward losses, deferred ESOP tax, income chargeable at special rates and company directorship.
ITR-3 applicability: Generally applies to individuals and HUFs with business or professional income who are not eligible for ITR-1, ITR-2 or ITR-4.
Filing deadline: The deadline for non-audit income-tax returns is 31 August.

livemint.com · 1 week ago