Difference between ITR 4 & ITR 4S

When you have to report income of a business or a profession, ITR-4 is your tax return form. Almost everyone who has a business, however big or small, can file this form. There is no minimum income you should earn to file this return. A shopkeeper, a doctor, a tutor, a retailer, a wholesaler, an insurance agent, interior decorator or fashion designer, everyone can file their tax return in ITR-4.

ITR-4 is a detailed form, possibly one of the two longest of all tax return forms (see summary at the end). If you run a business it's likely you have heard of the ITR-4S, a much shorter form which is also applicable to businesses. But not all businesses can file ITR-4S.

ITR-4S is a special case ITR, applicable for businesses where income is calculated on 'presumptive method'. In simple words the presumptive method lets you report your income as 8 per cent of your gross receipts (as per section 44AD of the income tax act) or as Rs 7,500 per month for each vehicle if you are in the business of plying, leasing or hiring trucks (as per section 44AE). You don't have to maintain accounting records of your business and advance tax rules don't apply to you. To top it all, ITR-4S is barely a four page document, which you can fill in a short time. But there is a catch; you need to meet the following conditions to file ITR-4S -

Your gross receipts or turnover must be less than Rs 1 crore.
You must be resident of India.
You may be an individual, a HUF or a partnership firm but not a company.
Also ITR-4S is not allowed to be filed where there is:

Income from commission or brokerage
Agency business

Income of professionals: Who are carrying on profession of legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, an authorized representative, film artist, company secretary and information technology. Authorized representative means: Any person, who represents someone, for a fee or remuneration, before any tribunal or authority under law. Film artist includes a producer, actor, cameraman, director, music director, art director, dance director, editor, singer, lyricist, story writer, screenplay writer, dialogue writer, dress designer - basically any person who is involved in his professional capacity in the production of a film.(These are the professions listed under section 44AA(1)).

Ownership of more than one house property
Capital gains
Losses to be carried forward
Agriculture income or exempt income more than Rs 5,000

A resident taxpayer who holds any asset outside India or financial interest in any foreign entity
A resident taxpayer who is a signing authority in any bank account located outside India or has income from any source outside India

Speculative income like winning from lotteries, horse races
Relief claimed by taxpayer under Section 90, 90A or 91

In all such cases, ITR-4 must be filed for your business. It's possible you have more than one business, and you have opted for presumptive scheme for one of them. In such a case, you still have to file ITR-4, since you can file only one return form. You can include income of presumptive business in ITR-4.