What is the ITR 4?
Those assessees who have opted for presumptive income scheme under Section 44ADA, Section 44AD and Section 44AE of the Income Tax Act are required to file their return in ITR-4
However, if the turnover exceeds two crores, the taxpayer will have to file ITR-3.
Who is required to file ITR 4?
ITR is to be filed by an individual’s/HUF/ partnership firm whose total income of includes:
Salary having income up to fifty lakh
Income from two House Property having income up to fifty lakh
Business income under section 44AD or 44AE
Income from profession calculated under section 44ADA
Income from Other Sources having income up to fifty lakh
Objectives of Tax Audit
To ensure that the books of account and other records are properly kept and maintained.
To ensure that the records reflect the correct income of the tax-payer and claims for deduction are correctly made.
To Ensure that proper presentation of accounts must be maintained by management before the tax authorities and to save the Assessing Officer’s time in carrying out routine verification.
To ensure that the proper authorities are provided the audited financial statements along with the relevant data and information.
Who is not required to file ITR 4?
Cannot use this form
An individual/ HUF having income from salary, house property or other sources above fifty lakh
An individual who is either a director in a company and investment has made in unlisted equity shares
How do I file my ITR-4 Form?
It can be submitting your ITR-4 Form either online or offline.
Offline:
In any of the following cases, the ITR form can be filed offline.
a. The individual is of the age of 80 years or more.
b. if the income of the individual is less than five lakhs and who don’t have to claim a refund in the income tax return
The return can be filed offline:
By furnishing :
a return in a physical paper form
a bar-coded return
And then the Department will issue you an acknowledgment at the time of submission of your physical paper return.
Online/Electronically:
a. By furnishing the return electronically with digital signature
b. Transforms the data electronically and then submitting the verification of the return in Return Form ITR-V
c. ITR-4 Form submitted electronically can be verified by a digital signature and the acknowledgment, in form ITR V, will be sent to your registered email id. No further action is required.
d. However, acknowledgment can be downloaded manually from the income tax e-filing portal and sent to the Income Tax Department’s CPC office in Bangalore within 120 days of e-filing, in case where it is not verified electronically by a digital signature or Aadhaar based OTP.
Who is required to get the accounts audited?
Audit of accounts is required in the following cases:
- A person carrying on business or profession is required to get his accounts audited before the“specified date” by a Chartered Accountant,
- if the total sales, turnover or gross receipts of business exceed 1 CR. in any previous year; or if the gross receipts in profession exceed 50 lakhs in any previous year; or
- where the assessee is covered under section 44AE and claims that the profits and gains from business are lower than the profits and gains computed on a presumptive basis.
- where the assessee is carrying on a notified profession under section 44AA, and he claims that the profits and gains from such professions are lower than the profits and gains computed on presumptive basis under section 44ADA and his income exceeds the basic exemption limit.
- where his income exceeds the basic exemption limit and the assessee is covered under section 44AD and
Audit Report:
A report of the audit in the prescribed forms, by the persons listed above, has to be furnished by the specified date. The Board, for this purpose, has prescribed, under Rule 6G, Forms 3CA/3CB/3CD containing forms of audit report and particulars to be furnished therewith
Form 3CA/3CB and 3CD
A tax audit conducted by the chartered accountant and the report is to be furnished in the prescribed form.
The prescribed form for audit report, in respect of audit conducted under section 44AB, is Form 3CB and the prescribed particulars are to be reported in Form 3CD
Due Date by which taxpayer should get his accounts AUDITED:
A person covered under section 44AB should get his accounts audited and should obtain the audit report on or before the due date of filing of the return of income, i.e., on or before 30th September of the relevant assessment year,
e.g.
Tax audit report for the F.Y 2017-18 corresponding to assessment year 2018-19 should be obtained on or before 30th September, 2018
The due date for filing an audit report under sec 44AB has been extended from September 30, 2018, to October 31, 2018, vide F.No. 225/358/2018/ITA.II dated October 08, 2018.
The tax audit report is to be filed electronically by the chartered accountant, to the Income-tax Department. The taxpayer has to approve the report, once it is filed by the chartered accountant, from his e-fling account with the Income-tax Department.
Penalty:
The penalty shall be lower in the following areas.
• 0.5% of the total sales, turnover or gross receipts, or
• Rs.1,50,000.
However, according to the relevant section, no penalty shall be imposed if reasonable cause for such failure is proved.
