Which of the following persons cannot use ITR-4?
1. Who is a director of a company
2. Who has held any unlisted equity shares
3. Who has any asset located outside India
4. A firm (other than LLP) if the assessee is a Resident
5. Who has income from other sources
Choose the most appropriate answer from the options given below:

Correct option is A

ITR-4 (Sugam) is used by individuals, HUFs, and firms (other than LLPs) who have opted for the Presumptive Income Scheme under Sections 44AD, 44ADA, or 44AE of the Income Tax Act. However, there are specific conditions under which taxpayers cannot use ITR-4.

1. Who is a director of a company

   • Cannot use ITR-4: A company director must file ITR-2 or ITR-3, as ITR-4 does not cover individuals with such designations.

2. Who has held any unlisted equity shares

   • Cannot use ITR-4: Those holding unlisted equity shares must disclose additional details, which ITR-4 does not accommodate. They must file ITR-2 or ITR-3.

3. Who has any asset located outside India

   • Cannot use ITR-4: Individuals with foreign assets or foreign income must file ITR-2 or ITR-3 to provide detailed disclosures.

4. A firm (other than LLP) if the assessee is a Resident

   • Can use ITR-4: Resident firms (other than LLPs) are eligible to use ITR-4 if they meet the presumptive income conditions.

5. Who has income from other sources

   • Can use ITR-4: ITR-4 allows income from other sources (such as interest and dividends) as long as the total income includes presumptive income and does not exceed the prescribed threshold.

Therefore, persons mentioned in statements 1, 2, and 3 cannot use ITR-4, making Option (a) the correct answer.

Information Booster:

Key Ineligibility Criteria for Using ITR-4:

• Individual is a Director of a Company.
• Holds unlisted equity shares during the financial year.
• Owns foreign assets or earns foreign income.
• Has total income exceeding the prescribed limit of ₹50 lakh.
• Derives income from speculative business, capital gains, or profession not covered under presumptive taxation.
• Is liable for tax under Section 92E (related to international transactions).

Additional Knowledge:

1. A firm (other than LLP) if the assessee is a Resident:

   • Eligible for ITR-4: Resident firms (excluding LLPs) can file ITR-4 if they qualify for presumptive taxation under Sections 44AD, 44ADA, or 44AE.

2. Who has income from other sources:

   • Eligible for ITR-4: Taxpayers earning income from "Other Sources" (e.g., interest, dividends) can use ITR-4, provided such income does not exceed ₹50 lakh and the taxpayer meets other eligibility criteria.