Normally ITR 4 is filled for small business (covered in Section 44AD, Section 44ADA and Section 44AE)

However in case of Audit, ITR 3 is filled

Small propreitorship.jpg


Section 44ADA .jpg


Section 44AE.jpg


If Gross Total Income is upto 250000

  • No need to file ITR
  • (Gross Total Income=Income from Business+ All other Incomes)
  • However Deductions(Section 80C) etc are not reduced while calculating GTI
  • (Although ITR Filing is not compulsory If GTI upto 250000,some individuals do file it as it is easier to apply for Foreign VISA and Bank loan if ITR is filed)

If Employee’s Gross Total Income > 250000

  1.  Income Tax Return is compulsory even if no tax payable if GTI >250000
  2. ITR Form Normally filled is ITR 4. However,if proprietor has other incomes like Capital Gaina Income,he has tofill ITR 3
  3. If TDS deducted by Bank etc, then TDS Certificate in Form 16A to be taken from company to file ITR
  4. It is compulsory for Company has to give this TDS Certificate by 15 May of next year
  5. In case tax is payable, first tax is paid through Challan 281 and then Return is filed



  • In this case,ITR 4 cannot be filed
  • It is compulsory to file ITR 3
  • Also accounts are required to be audited by CA



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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.