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Re ITR 4

KIYOSH (TAX CONSULTANT) (332 Points)

22 May 2011

A person doing trading activity having turnover around 20 Lacs. He is maintaing books of account & income is above 8% of turnover.

Q : Should he use ITR 4 OR ITR 4S ?

Please clarify.

Thanks in advance

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11 Replies

Riyaz (accountant) (310 Points)
Replied 22 May 2011

I think it is ITR-4 becoz its a business activity

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CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 22 May 2011

ITR 4

Devendra (Chartered Accountant) (4775 Points)
Replied 22 May 2011

THE ASSESSEE CAN FILE HIS ITR IN ITR-4S BY SHOWING PROFIT @ 8% ON SALES. IF THE ASSESSEE WANTS TO SHOW A PROFIT LESS THAN 8% OF SALES, THEN HE WILL HAVE TO GET HIS ACCOUNTS AUDITED FROM A CHARTERED ACCOUNTANT.

REGARDS,

DEVENDRA K

Arvind Sharma (ACA) (1432 Points)
Replied 22 May 2011

Agree with Devendra

Naina (CA Student) (477 Points)
Replied 22 May 2011

I think ITR - 4 should be used in this case because the assessee is maintaining books of accounts. ITR - 4S is to be filed where no books of accounts are being maintained and income is presumed to be 8% or more.

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Balram Begari (Accountant) (122 Points)
Replied 22 May 2011

Dear Devendra,

I dont think audit is required when his business turnover not crossed 60lac.

so i dont't he should go for audit unnecesary.

Vivek Mehta (CA, DISA,CS, MBA) (I am in Practice and also giving understanding and guidance to the Students of CA Final and IPCC for various subjects esp for Direct Tax.) (1629 Points)
Replied 22 May 2011

ITR 4S is required if the assessee is declaring the income on presemptive basis. In case of declaring higher income no need of audit and return can be filled and shall be filled in ITR 4 only

CA. Manav Goel (CHARTERED ACCOUNTANTS) (351 Points)
Replied 22 May 2011

If he want to opt only presumptive taxation, he should file Itr 4S, otherwise Itr 4

Saurabh Aggarwal (Chartered Accountant) (371 Points)
Replied 23 May 2011

Dear Kiyosh

In your case since the assessee is a trader ,the assessee has two options.

Case 1. He may Complute Income on Presumptive Basis u/s 44AD for A.Y. 2011-12

In this case he may take income = minimum 8% of total turnover. If he takes income less than 8% he has to get accounts audited u/s 44AB by a CA. He has to file ITR4S if compute income on presumptive basis.

Case 2. He may maintain proper books of Accounts.

In this case his income shall be actual book profit but in case it falls below 8% of turnover, again he has to get accounts audited u/s 44AB. He has to file ITR 4 in this case.

You may now select the option as per your suitability,

Thanks & Regards

Saurabh Aggarwal

1 Like

Jayant D Kalpavriksha (Chartered Accountant) (25 Points)
Replied 27 May 2011

The assessee has to file the ITR 4 in this case as he has maintained the boks of accounts and records. Also the profit declared is more than 8%. ITR 4S will be applicable only when there is presumptive taxation.

Jayant C.A.

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SURANA (PROPRIETOR) (515 Points)
Replied 04 August 2011

Assessee have done a business activity where he has bought good worth Rs.10 lacs in single transaction and sold the same at Rs.10.30 lacs in single bill. So he has only single bill of purchase and sales.

Now he has his books of account...

if he goes for Audit then he has to pay Audit Fees and then he has to go for Sales tax Audit too...

And if he goes Under 44AD then he has to pay tax on 8% , whereas his actual business income is only 3%

In today competitive world having more then 8%NP in all business type is not possible...

Mobile bought for 10000/- and sold for Rs.10200/- , NP 200 (2%)

So how far this provision is correct???

And at the same time no benefit in capital account...

Govt gives benefit of Rs.1000/- (by increasing the tax free limit of Rs.10000/-) and Increasing the turnover limit under 44AB, but took away huge amount from the assessee....