Choosing the right ITR form between ITR-3 and ITR-4 can be confusing for self-employed individuals in India. If you’re also reeling from this confusion, join us as we clear the air in this video!
First, we’ll discuss ITR-3. This form can be ideal for business owners like shopkeepers, consultants, freelancers, or anyone running their own practice. If you're filing taxes on business income as a Hindu Undivided Family, ITR-3 could be your go-to option. However, remember that those with foreign income or single-property rental income cannot use ITR-3.
Next, you'll understand which incomes ITR-3 covers. For this form, you can include business earnings, professional income, and other sources. These could be capital gains and income from multiple rental properties. We’ll explain how this could help those with a more complex income structure.
Then, the video will explore ITR-4. This is for individuals or HUFs whose income comes from a business or profession under the presumptive income scheme. Here, business income is calculated at 8% for non-digital transactions and 6% for digital ones. You’ll also learn that it’s set at 50% of gross receipts for professionals.
In summary, ITR-3 could be better suited for complex income structures, while ITR-4 might be ideal for simpler ones.
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