Whether a small businessman needs to fill all details of Balance Sheet in ITR 4?


The Income Tax Department has interestingly named ITR 4 form as Sugam which in Hindi means intelligible or approachable. The form is largely used by tax payers opting for presumptive income which is taxed at 8% or 6% of gross receipts.

The form eases life for small businesses (gross receipts lower than Rs. 2 crores) form the hassle of maintaining detailed books of accounts. However, if the businessman would like to claim higher tax deduction and pay lower tax, he will have to justify the same with detailed books of accounts and records.

One more benefit of the presumptive tax is that the taxa payer need not get books audited under Section 44AB (tax audit) saving time and costs.

ITR 4 is to be used by:

ITR 4 is to be used by an individual/ HUF/ Partnership Firm whose total income for the assessment year 2018-19 includes: Business income where such income is computed in accordance with special provisions referred to in sections 44AD, 44ADA and 44AE of the Act for computation of business income (presumptive income whereby taxable income is assumed to be 8% or 6% of gross receipts), Income from profession, Salary income, Income from One House Property or income from other sources.

Two sections of ITR 4 require information on assets and liabilities.

Small businessmen need to fill only specific information in Schedule AL if the income (not gross receipts but presumptive income) exceeds Rs. 50 lacs. Also, small businessmen need not fill all details of balance sheet in Schedule E as below:

Rupee Tax – making every rupee count

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