Introduction

Filing income tax returns can be a daunting task for many, especially for those using ITR-4. This form is primarily designed for individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) who are engaged in a business or profession and are opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE. However, errors during the filing process can lead to complications, including defective returns under Section 139(9). In this article, we will discuss the most common mistakes made while filing ITR-4 for the Assessment Year (AY) 2026-27 and how to avoid them.

Common Mistakes in Filing ITR-4

1. Selecting the Wrong ITR Form

One of the primary mistakes is selecting the incorrect ITR form. Taxpayers engaged in business or profession often confuse ITR-3 and ITR-4. The choice between these forms can significantly impact the tax liability and compliance requirements. Ensure you choose the right form based on your income sources:

• ITR-3: For individuals and HUFs who have income from business or profession and also have other sources of income.
• ITR-4: For individuals and HUFs opting for presumptive taxation.

For more clarity, refer to our article on ITR-3 vs ITR-4: Which Form Should Business Owners Choose?

2. Incorrect Reporting of Income

Accurately reporting all sources of income is crucial. Many taxpayers forget to include:

• Income from other sources like interest, dividends, etc.
• Income from presumptive taxation that should be declared under the relevant sections.

Make sure to cross-verify your income with your AIS/Form 26AS before filing.

3. Misunderstanding Presumptive Income Provisions

ITR-4 allows taxpayers to declare their business income on a presumptive basis. However, many are unaware of the limits and conditions applicable:

• Section 44AD: Applicable for resident individuals/HUFs/partnership firms with a turnover up to Rs. 2 crore.
• Section 44ADA: For professionals with gross receipts up to Rs. 50 lakh.
• Section 44AE: For those engaged in the business of plying, hiring, or leasing goods carriages.

Understanding these provisions can prevent incorrect income declaration.

4. Ignoring Deductions Under Chapter VI-A

Taxpayers often overlook deductions available under Chapter VI-A. Common deductions include:

• Section 80C: Investments in specified savings schemes.
• Section 80D: Insurance premium payments.
• Section 80G: Donations to charitable institutions.

These deductions can significantly reduce tax liability, so ensure you claim them all.

5. Incorrect Calculation of Taxable Income

Many taxpayers fail to correctly calculate their taxable income. This can happen due to:

• Miscalculating presumptive income based on the wrong percentage.
• Not accounting for losses carried forward from previous years.

It is crucial to maintain accurate records and use appropriate calculators or software for precise computation.

6. Not Filing Before the Due Date

Filing ITR-4 after the due date can lead to penalties and interest. For AY 2026-27, the due date for filing is typically July 31, 2026, for individuals. Always keep track of the deadlines!

7. Not Verifying or Acknowledging the ITR Receipt

Post-filing, many taxpayers fail to verify their return or acknowledge the ITR receipt. This verification can be done through:

• e-verification using OTP, Aadhaar, or Digital Signature.
• Sending a signed copy of ITR-V to CPC, Bengaluru.

Not completing this step can lead to the return being treated as invalid.

Checklist for Filing ITR-4

Here’s a quick checklist to ensure a smooth ITR-4 filing process:

• Determine the correct ITR form.
• Accurately report all sources of income.
• Understand and apply presumptive taxation provisions correctly.
• Claim all eligible deductions under Chapter VI-A.
• Verify the calculation of taxable income.
• File before the due date.
• Complete the verification process post-filing.

Practical Scenarios: When to Use ITR-4

Understanding these scenarios can help you determine if ITR-4 is the right form for you.

Conclusion

Filing ITR-4 can be straightforward if you are aware of the common mistakes and take proactive steps to avoid them. Ensuring compliance not only helps in smooth processing but also in minimizing tax liabilities. If you need further assistance in filing your ITR-4, consider reaching out for expert ITR filing support to ensure accuracy and compliance.

For comprehensive guidance on ITR filing for AY 2026-27, visit our Complete ITR Filing Hub.