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  • Category: Tax Planning

    How to file ITR 4 as a freelancer

    Looking for free guidance to file ITR 4 yourself? Get a free tutorial with detailed guidelines for self-filing IRT 4.

    I am looking to file ITR myself but could not find a proper guideline and have few questions if anyone here can explain.

    I am working as a freelancer, doing work from my own home. I want to know a few questions a listed below -

    1. How to create a balance sheet? I don't have any debt or credits.

    2. What will be the opening balance if I have an overdraft account balance which is in negative?

    Is there any tutorial online which explains all details to be filled in? That would be of great help.
  • Answers

    5 Answers found.
  • I suggest you consult a nearby auditor for the first time and sit with him when he is doing the same. You will understand the complete methodology and for the first year, the process will be complete. They may not charge you much. They may charge around 5oo rupees. There will not be any mistake also. Unnecessarily if you try on your own and if there is any mistake you will end up with paying more tax. Once you see how he is doing further years you can do it on your own.

    always confident

  • ITR-4 is to be filled by those entrepreneurs or business people who have opted for presumptive tax scheme. In this scheme if the turnover is less than 2 crore, one can opt for it and declare ones profits only as 8% of gross receipts. This is a simplified scheme to avoid the complex calculations of loss and profit.

    A freelancer can also avail this scheme if his gross receipts do not exceed 50 lakhs.

    The structure of ITR-4 form consists of following steps. It can be filled offline or online -
    Part A: General Information.
    Part B: Gross total income from the five heads of income.
    Part C: Deduction and total taxable income.
    Part D: Tax computation and tax status.
    Verification & signatures on the return.
    Schedule BP: Details of income from Business.
    Schedule AL :Asset and liability at the end of year(applicable in case where total income exceeds Rs 50 lakhs).
    Schedule IT: Statement of payment of advance-tax and tax on self-assessment.
    Schedule-TCS: Statement of tax collected at source.
    Schedule TDS1: Statement of tax deducted at source on salary.
    Schedule TDS2: Statement of tax deducted at source on income other than salary.
    Supplementary schedule TDS1
    Supplementary schedule TDS2
    Supplementary schedule IT
    Supplementary schedule TCS

    You can fill these steps yourself but in case of confusion you can take help of an agent or tax preparer who will guide you properly. This is an exhaustive form and many of these informations might be as 'nil' in your case.

    Knowledge is power.

  • ITR 4 is normally for small businessman having turnover less than Rs. 2.00 Cr. you can file return online by selecting relevant form.

    After Selecting Income tax return ITR 4, now to file Itr 4 online for AY 2018-19, you need to select the suitable assessment year and then preifill data , this return is for salaried people who earned the income in financial year 2017-18.

    To File ITR 4 visit the link below :
    * www.incometaxindiaefiling. gov. in
    *Logon to your account. If you don't have account then register there and create an account.
    *After successfully logon to your account, Go to E File.
    *Then Click on file ITR online.
    *Then select ITR 4 for AY 2018-19.

    Now you have a form in your computer screen and you have to fill it up and submit it. Yes there are videos available on youtube who guide you about how to fill ITR 4. Visit the below link :

  • ITR-4 form is one of the seven forms of Income Tax Department. This Return Form is to be used by an individual or HUF or by Partnership Firms whose total income for the assessment year 2018-19 includes:-
    (a) Business income where such income is computed in accordance with special provisions as mentioned in Sections 44AD and 44AE of the Act for computation of business income; or
    Income from Profession where such income is computed in accordance with special provisions mentioned in sections 44ADA or
    (b) Salary / Pension or
    (c) Income from one house property (excluding cases where there is brought forward loss or loss to be carried forward under this head) or
    (d) Income from other sources (excluding winning from Lottery and income from race horses).

    ITR-4 The form should be filled up as per the sequence mentioned below:-
    Part A, Schedules, Part B and Verification and details relating to TRP and counter signature of TRP, if the return is prepared by TRP.

    After mentioning the basic details, I must state that if you are going to file the return for the first time, it would be much better to get it prepared by a TRP. However, a balance sheet can be properly prepared if and only if the complete records of transactions during the financial year are available. The assumption of income in lieu of documentary evidence may not be proper for the purpose of filing ITR-4.

    In case of negative account balance, it will be adjusted in the balance sheet of the financial year for which the return is being filed.

    There are videos giving instructions to file ITR-4. But I would strongly advise you to get it prepared by a tax consultant, at least for the first few years. So, please collect all the necessary documents and meet a tax consultant at the earliest. File the return as quickly as possible.

    "If you are killed in action, you go to Heaven. If you win, you rule this Earth (as beautiful as Heaven). That is why, O son of Kunti, take a firm resolve and fight!"-- Shrimad Bhagwad Gita

  • First of all, it is very necessary to find out exactly as to what ITR form shall be filed in your case, as filing your return in wrong form may invalidate your return and you will have to resubmit a new return at later stage.
    As you said that you are a freelancer and hence the head 'Income from Business and Profession' will be applicable to you.
    For this head of Income ITR 3 is prescribed. Optional upto Rs.2 crore and compulsory, if the turnover exceeds Rs.2 crore. In my opinion even if the turnover does not exceed Rs. 2 crore you must opt for ITR 3 and not ITR 4, because there maybe a possibility that you may have not earned as much profit from your work as you are assuming. There is a possibility that the percentage of profit which have to mandatorily disclose in ITR 4 may never arrive in case of ITR 3, when you prepare your books of accounts.
    There can even be a possibility of loss which you can carry forward in ITR 3 but not in ITR 4.

    So it is advisable that you first consult a professional before taking the decision to file ITR 4 and lose on the benefits which maybe available to you in ITR 3.

    Live before you leave.

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