Instructions for filling FORM ITR-4

These instructions are guidelines for filling the particulars in this Return Form. In case of any doubt, please refer to relevant provisions of the Income-tax Act, 1961 and the Income-tax Rules, 1962.

1.Assessment Year for which this Return Form is applicable

This Return Form is applicable for assessment year 2011-2012 only, i.e., it relates to income earned in Financial Year 2010-11.

2. Who can use this Return Form

This Return Form is to be used by an individual or a Hindu Undivided Family who is carrying out a proprietary business or profession..

3.Annexure-less Return Form

4. Manner of filing this Return Form

5. Filling out the acknowledgement

Only one copy of this Return Form is required to be filed.  Where the Return Form is furnished in the manner mentioned at 5(i) or at 5(iv), the acknowledgement slip attached with this Return Form should be duly filled.

6. Codes for filling this Return Form

Under the heading ‘Filing Status’ in the Return Form details have to be filled regarding section under which the return is being   filed by ticking in the relevant box provided therein.        

7. Instructions for filling this Return Form

8. Brief Scheme of the Law– Before filling out the form, you are advised to read the following-

1. “Previous year” is the financial year (1st April to the following 31st March) during which the income in question has been earned.  “Assessment Year” is the financial year immediately following the previous year.
2. Total income is to be computed as follows, in the following order:
   1. Classify all items of income under the following heads of income-

      (A) Salaries; (B) “Income from house property”; (C) “Profit and gains from business or profession”; (D) “Capital gains”; and (E) “Income from other sources”.  [There may be no income under one or more of the heads at (A), (B), (D) and (E)].

   2. Compute taxable income of the current year (i.e., the previous year) under each head of income separatelyin the Schedules which have been structured so as to help you in making these computations as per provisions of the Income-tax Act.  These statutory provisions decide what is to be included in your income, what you can claim as an expenditure or allowance and how much, and also what you cannot claim as an expenditure/allowance.

      Set off current year’s headwise loss(es) against current year’s headwise income(s) as per procedures prescribed by the law. A separate Schedule is provided for such set-off.

   3. Set off, as per procedures prescribedby the law, loss(es) and/or allowance(s) of earlier assessment year(s) brought forward.  Also, compute loss(es) and/or allowance(s) that could be set off in future and is (are) to be carried forward as per procedures prescribed by the law.  Separate Schedules are provided for this.
   4. Aggregate the headwise end-results as available after (iv) above; this will give you “gross total income”.
   5. From gross total income, subtract, as per procedures prescribedby the law, “deductions” mentioned in Chapter VIA of the Income-tax Act.  The result will be the total income.  Besides, calculate agricultural income for rate purposes.

2) Computation of income-tax, education cess including secondary and higher education cess and interest in respect of income chargeable to tax(a)

1. Compute income-tax payable on the total income.  Special rates of tax are applicable to some specified items.  Include agricultural income, as prescribed, for rate purposes, in the tax computation procedure..
2. Add Education cess including secondary and higher education cess as prescribed on the tax payable.
3. Claim relief(s) as prescribed by the law, on account of arrears or advances of salary received during the year or of double taxation and calculate balance tax payable.
4. Add interest payable as prescribed by the law to reach total tax and interest payable.
5. Deduct the amount of prepaid taxes, if any, like “tax deducted at source”, “advance-tax” and “self-assessment-tax”.  The result will be the tax payable (or refundable).  

(3)  Obligation to file return

1. Every individual and HUF has to furnish the return of his income if his total income before allowing deductions under section 10A or section 10B or section 10BA or  Chapter VI-A (i.e., if his gross total income referred to in item 10 of Part B-TI as increased by item 6 of Schedule 10A, item f of Schedule 10A and item f of Schedule 10A of this Form) exceeds the maximum amount which is not chargeable to income tax [Rs. 1,60,000/- in case of individuals below the age of 65 years (other than women) and HUF, Rs. 1,90,000/- in case of women below the age of 65 years, and Rs. 2,40,000/- in case of individuals who are of the age of 65 years or more at any time during the financial year 2010-11].
2. The losses, if any, (item-15 of Part B-TI of this Form) shall not be allowed to be carried forward unless the return has been filed on or before the due date.
3. The deduction under sections 10A, 10B, 80-IA, 80-IAB, 80-IB and 80-IC shall not be allowed unless the return has been filed on or before the due date.

The Scheme of this form follows the scheme of the law as outlined above in its basic form. The Form has been divided into two parts. It also has thirty-one schedules. The details of these parts and the schedules are as under:-

1. Part A-GEN mainly seeks general information requiring identificatory  and other data;
2. Part A-BS seeks the balance sheet as on 31st March,2011;
3. Part A-P&L seeks information regarding the Profit and loss account  for the financial year 2010-11;
4. Part A-OI seeks other information. It is optional in a case not liable for audit under section 44AB
5. Part A-QD seeks information regarding quantitative details of the principal item of goods traded. It is optional in a case not liable for audit under section 44AB.

The second part, i.e, Part-B is regarding an outline of the total income and tax computation in respect of income chargeable to tax..

After Part B, there is –

1. a space for giving details of the transmission of the data of the form if the form has been furnished in accordance with the manner mentioned at instruction No.5(iii).
2.  a space for a statutory verification.,
3. A space for filling the details  if the return has been prepared by a Tax Return Preparer.

On pages 6 to 20, there are 31 schedules details of which are as under-

1. Schedule-S: Computation of income under the head Salaries.
2. Schedule-HP: Computation of income under the head Income from House Property
3. Schedule-BP: Computation of income under the head “profit and gains from business or profession”
4. Schedule-DPM: Computation of depreciation on plant and machinery under the Income-tax Act
5. Schedule DOA: Computation of depreciation on other assets under the Income-tax Act
6. Schedule DEP: Summary of depreciation on all the assets under the Income-tax Act
7. Schedule DCG: Computation of deemed capital gains on sale of depreciable assets
8. Schedule ESR: Deduction under section 35 (expenditure on scientific research)
9. Schedule-CG: Computation of income under the head Capital gains.
10. Schedule-OS: Computation of income under the head Income from other sources.
11. Schedule-CYLA: Statement of income after set off of current year’s losses
12. Schedule-BFLA:  Statement of income after set off of unabsorbed loss brought forward from earlier years.
13. Schedule- CFL: Statement of losses to be carried forward to future years.
14. Schedule- 10A:  Computation of deduction under section 10A
15. Schedule- 10AA: Computation of deduction under section 10AA
16. Schedule- 10B: Computation of deduction under section 10B
17. Schedule- 10BA: Computation of deduction under section 10BA
18. Schedule- 80G:   Details of donation entitled for deduction under section 80G
19. Schedule- 80IA: Computation of deduction under section 80IA
20. Schedule- 80IB: Computation of deduction under section 80IB
21. Schedule- 80IC/ 80-IE: Computation of deduction under section 80IC/ 80-IE.
22. Schedule-VIA: Statement of deductions (from total income) under Chapter VIA.
23. Schedule SPI: Statement of income arising to spouse/ minor child/ son’s wife or any other person or association of persons to be included in the income of assessee in Schedules-HP, BP, CG and OS.
24. Schedule-SI: Statement of income which is chargeable to tax at special rates
25. Schedule-IF: Information regarding partnership firms in which assessee is a partner
26. Schedule-EI: Statement of Income not included in total income (exempt incomes)
27. Schedule-IT: Statement of payment of advance-tax and tax on self-assessment.
28. Schedule-TDS1: Statement of tax deducted at source on salary.
29. Schedule-TDS2: Statement of tax deducted at source on income other than salary.
30. Schedule-TCS: Statement of tax collected at source

10. GUIDANCE FOR FILLING OUT PARTS AND SCHEDULES

1. All items must be filled in the manner indicated therein; otherwise the return maybe liable to be held defective or even invalid.
2. If any schedule is not applicable score across as “—NA—“.
3. If any item is inapplicable, write “NA” against that item.
4. Write “Nil” to denote nil figures.
5. Except as provided in the form, for a negative figure/ figure of loss, write “-” before such figure.
6. All figures should be rounded off to the nearest one rupee. However, the figures for total income/ loss and tax payable be finally rounded off to the nearest multiple of ten rupees.

2. Sequence for filling out parts and schedules

1. Part A
2. Schedules
3. Part B
4. Verification
5. Details relating to TRP and counter signature of TRP if return is prepared by him.

11. Part A-GEN

Most of the details to be filled out in Part-Gen  of this form are self-explanatory.  However, some of the details mentioned below are to be filled out as explained hereunder:-

12. Part A-BS  and Part A-P&L

13. Part A- OI  and Part A-QD 

14. Schedules

(b) Schedule-HP,-

In case, a single house property is owned by the assessee which is self-occupied and interest paid on the loan taken for the house property is to be claimed as a deduction. This schedule needs to be filled up. If there are more than three house properties, the details of remaining properties be filled in a separate sheet in the format of this Schedule. and attach this sheet with this return. The results of the income/ loss derived from all the properties have to be filled in last row of this Schedule. Following points also need to be clarified,-

1. Annual letable value means the amount for which the house property may reasonably be expected to let from year to year, on a notional basis: Deduction for taxes paid to local authority shall be available only if the property is in the occupation of a tenant, and such taxes are borne by the assessee and not by the tenant and have actually been paid during the year.
2. Deduction is available for unrealized rent in the case of a let-out property.  If such a deduction has been taken in an earlier assessment year, and such unrealized rent is actually received in the assessment year in question, the unrealized rent so received is to be shown in item 4a of this Schedule.
3. Item 4b of this Schedule relates to enhancement of rent with retrospective effect.  Here mention back years’ extra rent received thereon, and claim deduction @ 30% of such arrear rent received.

(c) Schedule-BP,-

1. The computation in this schedule has to be started on the basis of profit before tax as shown in item 43 of Part-A- P&L.
2. In case any item of addition or deduction not covered by the items mentioned in this schedule be filled in residual items 21 and 26 of this schedule.
3. In case accounts of business or profession are not maintained, the profit as entered into by you in item 50d of Part A-P&L.
4. In case, agricultural income to be excluded on the basis of rule  7A, 7B or 7C (in business of growing and manufacturing  tea, coffee etc), it shall not be included in the item 5c of this schedule.
5. In A-37, net profit or loss from business or profession is to be computed, only in special cases, e.g. business of growing and manufacturing tea, coffee, etc., where rules 7A, 7B or 7C is applicable otherwise, the figure of profit/ loss as computed is A-36 may be entered.
6. Income earned by the assessee by way of salary, commission, bonus, interest, etc. from other firms as if in the capacity of a partner, which has not been included in the profit and loss account of the proprietory business needs to be disclosed in item No. A23 in Schedule BP.
7. Item C of this schedule computes the total of profit or loss from business or profession (other than speculative business and profit or loss from speculative business) (item A37 + item B41). Please note that if balance in item B41 in respect of speculative business is a loss, same shall not be set-off against profit from non-speculative business. In such situation, only the figures of item A37 be entered in item C.
8. (viii) The special provision for computing profits and gains of retail business under section 44AF shall NOT be applicable for the AY 2011-12. Hence the column against 44AF should be left BLANK for the current assessment year.

(d) Schedule-DPM, Schedule DOA, Schedule DEP and Schedule DCG, –

For sake of convenience, computation of depreciation allowable under the Income-tax Act [other than in case of an undertaking  generating electricity which may at its option claim deprecation on straight line method under section 32(1)(i)], has been divided into two parts i.e. in schedules DPM (depreciation on plant and machinery )and DOA (depreciation on other assets).  The summery of depreciation as per these schedules has to be shown in schedule DEP. Deemed short term capital gain, if any as computed in schedule DPM and DOA has to be entered into schedule DCG.

e) Schedule ESR: Deduction under section 35 (expenditure on scientific research), –

In column (2) of this schedule, please furnish the details of deduction to which you are entitled under provisions of this section. In column (1), please enter the amounts of expenses of the nature covered by section 35 which are, if, debited to profit and loss account. Please note that no deduction for depreciation is available in respect of capital asset for which deduction under section 35(1)(iv) has been claimed.

f) Schedule-CG,-

1. If more than one short-term capital asset has been transferred, make the combined computation for all the assets. Similarly, make the combined computation for all the assets if more than one long-term capital asset has been transferred.
2. For computing long-term capital gain, cost of acquisition and cost of improvement may be indexed, if required, on the basis of following cost inflation index notified by the Central Government for this purpose
3. Sections 54/54B/54D/54EC/ 54F/54G/54GA mentioned in this schedule provides exemption on capital gains subject to fulfillment of certain conditions.  Exemption under some of these sections is available only in respect of long-term capital gains. Therefore, please ensure that you are claiming the benefit of any of these sections correctly in accordance with the provisions of law.
4. Item C of this Schedule computes the total of short-term capital gain and long-term capital gain (item A6 + item B6). Please note that if balance in item B6 in respect of long-term capital gain is a loss, same shall not be set-off against short-term capital gain. In such situation, the figure of item B6 would be entered as 0 and then the figures of item A6 be added in item C.

g) Schedule-OS,-

1. Against item 1a and 1b, enter the details of gross income by way of dividend and interest which   is not exempt.
2. Against item 1c,  indicate the gross income from machinery, plant or furniture let on hire and also such income from building where its letting is inseparable from the letting of the said machinery, plant or furniture, if it is not chargeable to income-tax under the head “Profits and gains of business or profession”.
3. Income from owning and maintaining race horses is to be computed separately as loss from owning and maintaining race horses cannot be adjusted against income from any other source, and can only be carried forward for set off against similar income in subsequent years.
4. Winnings from lotteries, crossword puzzles, races, etc., are subject to special rates of tax; hence a separate item is provided and the income from these can not be adjusted against the losses arising under the head Income from other sources.
5. Item 5 of this Schedule computes the total income chargeable under the head “Income from other sources” (item 1g + item 2 + item 3 + item 4c). If balance in item 4c from owning and maintaining race horses is a loss, please enter 0 and enter the total of item 3 in item 5 only.

h) Schedule-CYLA,-

1. Mention only positive incomes of the current year in column 1, headwise, in the relevant rows.
2. Mention total current year’s loss(es), if any, from house property, business or profession and other sources (other than losses from race horses) in the first row against the heading loss to be adjusted under the respective head. These losses are to be set off against income under other heads in accordance with the provisions of section 71. The amount set off against the income of respective heads has to be entered into in columns 2, 3 and 4, in the relevant rows.
3. Mention the end-result of the above inter-head set-off(s) in column 5, headwise, in relevant rows.
4. Total of loss set off out of columns 2, 3 and 4 have to be entered into row vii.
5. The losses remaining for set off have to be entered in row viii.

i ) Schedule-BFLA,-

1. Mention only positive incomes of the current year (after set-off of loss in Schedule-CYLA in column 1, headwise in relevant rows.
2. The amount of brought forward losses which may be set off are to be entered in column 2 in respective rows.
3. The end result of the set off will be entered in column 3 in respective heads. The total of column 3 shall be entered in row viii which shall give the amount of gross total income.
4. The total amount of brought forward losses set off during the year shall be entered in column 2 of row vii.

j) Schedule-CFL,-

1. In this Schedule, the summary of losses carried from earlier years, set off during the year and to be carried forward for set off against income of future years is to be entered.
2. The losses  under the head “house property”, ‘profit and gains of business or profession” short term capital loss and long term capital loss, are allowed to be carried forward for 8 years. However, loss from owning and maintaining race horses can be carried forward only for 4 assessment years.

k) Schedule- 10A,-

1. If there are more than one undertaking entitled for deduction under this section, please enter the details of deduction for each undertaking separately.
2. The amount of deduction under this section for an undertaking shall be as per item 17 of Form No.56F being the report of audit under section 10A.

l) Schedule-10AA,-

If there are more than one undertaking entitled for deduction under this section, please enter the details of deduction for each undertaking separately.

m) Schedule-10B,-

1. If there are more than one undertaking entitled for deduction under this section, please enter the details of deduction for each undertaking separately.
2. The amount of deduction under this section for an undertaking shall be as per item 17 of Form No.56G being the report of audit under section 10B.

n) Schedule- 10BA,-

1. If there are more than one undertaking entitled for deduction under this section, please enter the details of deduction for each undertaking separately.
2. The amount of deduction under this section for an undertaking shall be as per item 15 of Form No.56H being the report of audit under section 10BA.

o) Schedule- 80G,-

1. In this Schedule, the details of donation given by you which are entitled for deduction under section 80G have to be filled.
2. In part-A of this Schedule, the details of donations which are entitled for 100% deduction are to be filled in. Section 80G(1)(i) read with section 80G(2) contains the list of funds/ institutions donations to which are eligible for 100% deduction in hands of the donar.
3. In Pat-B of this Schedule, the details of donations which are entitled for 50% deduction are to be filled in where such donations have been given to the funds/ institutions which are not required to be approved by an authority for this purpose. Section 80G(1)(i) read with section 80G(2) also contains the list of such funds/ institutions.
4. In Part-C of this Schedule, the details of donations to the funds/ institutions which are approved by the Commissioner of Income-tax for this purpose.
5. Where the aggregate donations referred to in Part-C and donations referred to in sub-clauses (v), (vi), (via) and (vii) of clause (a) and in clauses (b) and (c)of section 80G(2) exceeds 10% of total income (before deduction under other provisions of Chapter VI-A), the excess amount shall be ignored for purpose of computing deduction under section 80G.

p) Schedule- 80IA, Schedule- 80IB, Schedule- 80IC and Schedule-80-IE –

1. If there are more than one undertaking entitled for deduction under any of these sections, please enter the details of deduction in relevant schedule for each undertaking separately.
2. The amount of deduction for an undertaking shall be as per item 30 of Form No.10CCB being the report of audit under section 80-IA/ 80-IB/ 80-IC and 80-IE.

q) Schedule-VIA,-

1. The total of the deductions allowable is limited to the amount of gross total income.  For details of deductions allowable, the provisions of the Chapter VI-A may kindly be referred to
2. For deductions under sections 80-IA, 80-IB, 80-IC and 80-IE the amount as shown in Schedules 80-IA, 80-IB and 80-IC be filled. The amount of deduction to be claimed under section 80-ID may be shown in this Schedule itself.
3. etails of other deductions which are available are as under:-
   1. Section 80C (Some of the major items for deduction under this section are- amount paid or deposited towards life insurance, contribution to Provident Fund set up by the Government, recognised Provident Fund, contribution by the assessee to an approved superannuation fund, subscription to National Savings Certificates, tuition fees, payment/ repayment for purposes of purchase or construction of a residential house and many other investments)(for full list, please refer to section 80C of the Income-tax Act) (Please note that as provided in section 80CCE, aggregate amount of deduction under section 80C, 80CCC and 80CCD shall not exceed one lakh rupees).
   2. Section 80CCC (Deduction in respect of contributions to certain pension funds).
   3. Section 80CCD (Deduction in respect of contributions to pension scheme of Central Government)
   4. Section 80CCF (Deduction in respect of long-term infrastructure bonds, not exceeding twenty-thousand rupees during the previous year).
   5. Section 80D (Deduction in respect of Medical Insurance Premium and contributions to CGHS).
   6. Section 80DD (Deduction in respect of maintenance including medical treatment of dependent who is a person with disability)
   7. Section 80DDB (Deduction in respect of medical treatment, etc.)
   8. Section 80E (Deduction in respect of interest on loan taken for higher education)
   9. Section 80G (Deduction in respect of donations to certain funds, charitable institutions, etc.)
   10. Section 80GG (Deduction in respect of rents paid)
   11. Section 80GGC (Deduction in respect of contributions given by any person to political parties)
   12. Section 80JJA (Deduction in respect and gains from business of collecting and processing of bio-degradable waste)
   13. Section 80QQB (Deduction in respect of royalty income, etc., of authors of certain books other than text books)
   14. Section 80RRB (Deduction in respect of royalty on patents)
   15. Section 80U (Deduction in case of a person with disability)

r) Schedule-SPI,-

1. Furnish the details of income of spouse, minor child, etc., if to be included in your income in accordance with provisions of Chapter V of the Income-tax Act.
2. The income entered into this Schedule has to be included in the respective head.
3. Section 10(32) provides exemption to extent of Rs. 1,500/- in respect of minor’s income for the purpose of clubbing. Therefore, exclude Rs. 1,500/- from the income of the minor while clubbing the income of the minor in the respective head. However, if income of the minor is to be clubbed in various heads, total exclusion should not exceed Rs. 1,500/-.

s) Schedule-SI,-

Mention the income included in total income which is chargeable to tax at special rates. The codes for relevant section and  special rate of taxes are given in Instruction No.9(iii).

t) Schedule-IF,-

1. This Schedule has to be filled for each firm in which you are partner.
2. In case you are partner in more than 5 firms, a separate sheet may be enclosed giving the details in same format.
3. In column 1 of the Schedule, furnish the name of the firm and in column 2 furnish the PAN No. of the firm in which the assessee is a partner. In column 3 and 4, the percentage share and amount of share in the profit of the firm as computed in accordance with the provisions of the Income-tax Act. Such share is exempt from tax in hands of the partner.
4. In column 5, please furnish the amount of capital balance (including the capital on which you are entitled for an interest) in the firm in which you are partner.

u) Schedule-EI,-

Furnish the details of income like agriculture income, interest, dividend, etc. which is exempt from tax.

v) Schedule-IT,-

1. In this schedule, fill out the details of payment of advance income-tax and income-tax on self-assessment.
2. The details of BSR Code of the bank branch (7 digits), date of deposit, challan serial no., and amount paid should be  filled out from the acknowledgement counterfoil.

w) Schedules-TDS1 and TDS2,-

1. In these Schedules fill the details of tax deducted on the basis of TDS certificates( Form 16 or Form No.16A) issued by the deductor(s).
2. Details of each certificate are to be filled separately in the rows. In case rows provided in these Schedules are not sufficient, please attach a table in same format.
3. It may please be noted that the TDS certificates are not to be annexed with the Return Form.
4. In order to enable the Income Tax Department to provide accurate, quicker and full credit for taxes deducted or collected at source, the taxpayer must ensure to quote PAN for every TDS transaction.

x) Schedule TCS,-

1. In this Schedule, fill the details of tax collected at source on the basis of TCS certificates (Form No. 27D) issued by the Collector.
2. In case rows provided in these Schedules are not sufficient, please attach a table in same format.
3. It may please be noted that the TDS certificates are not to be annexed with the Return Form.
4. In order to enable the Income Tax Department to provide accurate, quicker and full credit for taxes  collected at source, the taxpayer must ensure to quote PAN for every TCS transaction.

15. Part B-TI-Computation of Total Income

16. Part B-TI-Computation of tax liability on Total Income

17. Verification

18. Details regarding Tax Return Preparer (TRP)