The second form that is related to individuals having income from business and profession is ITR-4. This form requires a number of additional details to be filled in as compared to other forms and hence has to be considered separately. This is a slightly difficult form to fill for an individual.
Who has to fill this form?
An individual needs to file his return through this form if he has income from business or profession as a sole proprietor.
Even those with other types of income, in addition to such business income, will have to file their return through ITR-4. The form has adequate space to disclose other income.
The basic details and information that have to be mentioned in ITR-4 are similar to other forms. This basic detail consists of individual’s name, address, permanent account number (PAN), category of employer, type of return, residential status and other personal information. Even the details about income like salaries, income from house property, capital gains and income from other sources are same as on form ITR –2.
There is space for summary where only the positive income figure has to be mentioned. If there are losses, they have to be adjusted against these figures including the carry forward loss. The tax to be paid is then determined and the taxes already paid are adjusted against this.
There is space on the form for audit information. The name of the auditor and the number, along with the date of the audit report needs to be mentioned here. In addition, the nature of activities of the proprietorship business also has to be given.
An individual needs to furnish the entire balance sheet and the profit and loss account on the return form. All the items of these two statements have to be shown under various heads given in the form. These have to be fitted into the heads mentioned and there is a wide list of such heads present. It includes minute item-by-item details and since there are no attachments possible with the form, these figures have to be filled in the form itself.
There are some additional details that need to be covered. However, these are optional for those who do not have to get their accounts audited under Section 44AB. This includes items like method of accounting, method of valuation of stock, debits that have to be disallowed and so on. Again, this is a very exhaustive list and covers a lot of space so the person has to fill in only those details that are relevant. After this, the quantitative detail of the stock position needs to be given in a separate section of the form.
There is a separate schedule in ITR-4 that deals with business income. There is space here to calculate income by deriving profit figure from profit and loss account. There is also a separate section for depreciation figures on plant and machinery, and another section for other assets. All such depreciation figures have to be then added up to arrive at total depreciation figure.
There are also a host of deductions that can be availed by a business under various sections and there are separate spaces provided to calculate information related to sections like 10 A or 10B or 80G or 80IA or 80IB.