ITR 4 Case Study: Smart Tax Planning for FY 2024–25

This case study highlights how a self-employed professional opted for ***ITR 4*** under the presumptive taxation scheme and used simple, compliant tax planning strategies to reduce overall tax outgo for FY 2024–25, without maintaining detailed books of accounts.

Profile of the Taxpayer

Aarav Mehta, 38, is an independent digital marketing consultant based in Pune. He provides SEO and performance marketing services to startups and small businesses across India. His work is service-oriented, non-commission-based, and carried out entirely online. Aarav does not have any foreign income, capital gains, or multiple house properties, making him eligible to file ITR 4 under Section 44ADA.

For FY 2024–25, his gross professional receipts were ₹24,00,000, received entirely through banking channels.

Income Details and Presumptive Taxation

Instead of maintaining detailed books and undergoing an audit, Aarav opted for presumptive taxation under Section 44ADA, where 50% of gross receipts are treated as taxable professional income.

This presumptive income of ₹12,00,000 becomes the base for further tax planning.

Tax Planning Deductions Used (FY 2024–25)

Aarav focused on common yet effective deductions allowed under the old tax regime to reduce his taxable income.

Taxable Income Calculation

Tax Liability Comparison

Without tax planning (no deductions)

With tax planning using ITR 4

Overall Tax Saved

Key Takeaways from the Case Study

Aarav’s case shows that ITR 4 is not just a compliance-friendly return but also an effective tax planning tool for eligible professionals. By opting for presumptive taxation under Section 44ADA and combining it with structured deductions like NPS and health insurance, significant tax savings can be achieved without complex documentation. For self-employed professionals with straightforward income streams, this approach offers simplicity, certainty, and efficiency for FY 2024–25.