ITR-4, also known as Sugam, is a simplified Income Tax Return form designed for certain individuals, Hindu Undivided Families (HUFs), and Partnership Firms (excluding Limited Liability Partnerships – LLPs) who have opted for the presumptive taxation scheme under the Income Tax Act, 1961. “Sugam” means “easy” or “convenient,” highlighting its purpose of simplifying tax compliance for small businesses and professionals.
What is the Presumptive Taxation Scheme?
The presumptive taxation scheme is a simplified way of computing taxable income for small taxpayers. Instead of maintaining detailed books of accounts and calculating actual profits and losses, eligible taxpayers can declare their income at a fixed percentage of their turnover or gross receipts. This significantly reduces the compliance burden.
ITR-4 covers income from
- Business: Under Section 44AD or 44AE.
- Profession: Under Section 44ADA.
- Salary/Pension: (Only for Individuals).
- One House Property: (Excluding cases of brought forward loss or loss to be carried forward).
- Other Sources: (Excluding winnings from lottery, horse races, etc., and income taxable at special rates).
- Long-Term Capital Gains (LTCG) from Sale of Listed Equity Shares/Equity Mutual Funds (New for AY 2025-26): Similar to ITR-1, you can use ITR-4 if you have LTCG under Section 112A, provided this LTCG does not exceed ₹1.25 lakh. If your LTCG exceeds ₹1.25 lakh, or if you have other types of capital gains/losses, you must use ITR-3.
Who is Eligible to File ITR-4 (Sugam)?
ITR-4 can be filed by a Resident Individual, HUF, or Partnership Firm (other than LLP) if their total income for the financial year does not exceed ₹50 lakh and they have opted for the presumptive taxation scheme under any of the following sections.
Section 44AD (Presumptive Business Income)
- Applicability: For most small businesses.
- Turnover Limit: Gross receipts/turnover should not exceed ₹3 crore in the financial year (if at least 95% of receipts are through recognized banking channels; otherwise, the limit is ₹2 crore).
- Presumed Profit:
- 6% of gross receipts received through digital modes (cheque, bank transfer, online payments).
- 8% of gross receipts received in cash.
- Exclusions: This section does not apply to businesses engaged in plying, hiring, or leasing goods carriages, or businesses earning through commission/brokerage.
Section 44ADA (Presumptive Professional Income)
- Applicability: For specified professionals. These include individuals engaged in legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, or other notified professions.
- Gross Receipts Limit: Gross receipts should not exceed ₹75 lakh in the financial year (if at least 95% of receipts are through recognized banking channels; otherwise, the limit is ₹50 lakh).
- Presumed Profit: 50% of the total gross receipts.
Section 44AE (Presumptive Income from Plying, Hiring, or Leasing Goods Carriages)
- Applicability: For individuals, HUFs, or partnership firms who own not more than ten goods carriage vehicles at any time during the financial year and are engaged in the business of plying, hiring, or leasing such vehicles.
- Presumed Profit:
- Heavy Goods Vehicle (Gross Vehicle Weight exceeding 12 MT): ₹1,000 per ton of gross vehicle weight (or unladen weight) for every month or part of a month the vehicle is owned.
- Other than Heavy Goods Vehicle: ₹7,500 per vehicle for every month or part of a month the vehicle is owned.
Who Cannot File ITR-4?
You cannot file ITR-4 if
- Your total income exceeds ₹50 lakh.
- You are a Non-Resident (NRI) or a Resident but Not Ordinarily Resident (RNOR).
- You have income from more than one house property.
- You have taxable capital gains (other than the limited LTCG mentioned above under Section 112A).
- You are a Director in a company.
- You have invested in unlisted equity shares.
- You own foreign assets or have signing authority in any account located outside India.
- You have any income from a source outside India.
- You have income from winnings from lottery, horse races, or other legal gambling activities, or income taxable at special rates.
- You have brought forward losses or losses to be carried forward under any head of income.
- Your business income is NOT computed under Sections 44AD, 44ADA, or 44AE (in which case you might need to file ITR-3).
- You declare profits lower than the prescribed presumptive rate (6%, 8%, 50%, or per vehicle) and your total income exceeds the basic exemption limit (in which case you would need to maintain books of accounts and get a tax audit done, requiring ITR-3).
- Tax has been deducted under Section 194N.
- You have deferred tax payment on ESOPs.
Documents Required for ITR-4 Filing
PAN Card
- Of the individual/HUF/Firm.
Aadhaar Card
(For individuals).
Bank Statements/Passbook
For verifying turnover/receipts, bank interest, etc.
Form 26AS / AIS / TIS
For verifying TDS, TCS, advance tax paid, and other financial transactions.
Sales/Receipts Register/Invoices
Though detailed books are not required for presumptive taxation, a record of gross receipts/turnover is essential to calculate the presumptive income.
GST Data
If registered under GST, your GST returns will provide details of turnover.
Details of other income
Salary slips (if applicable), interest certificates for fixed deposits, etc.
Investment Proofs
For claiming deductions under Chapter VI-A (e.g., 80C, 80D, 80G, 80TTA, etc.) if opting for the old tax regime.
Home Loan Interest Certificate
If claiming interest deduction for one house property.
Udyam Registration Certificate
(Optional, but useful for MSME benefits).
Key Sections in ITR-4
ITR-4 includes various parts similar to ITR-1, with additional sections for business/professional income
- Part A: General Information: Personal details, filing status.
- Part B: Gross Total Income:
- Income from Salary/Pension: (If applicable for individuals).
- Income from House Property: (If applicable for one house property).
- Income from Business and Profession: This is the core section for presumptive income, where you declare turnover/gross receipts and the presumed income under Section 44AD, 44ADA, or 44AE.
- Income from Other Sources: (If applicable).
- Part C: Deductions and Taxable Total Income: Chapter VI-A deductions (if opting for old tax regime).
- Part D: Computation of Tax Payable: Calculation of tax liability, rebate, cess, interest.
- Part E: Other Information: Bank account details, details if filing under the 7th proviso to Section 139(1).
- Schedule BP (Business and Profession): This is where you declare your gross turnover/receipts, presumptive income, and details related to the presumptive sections.
- Schedule IT: Details of advance tax and self-assessment tax payments.
- Schedule TDS: Details of Tax Deducted at Source.
- Schedule TCS: Details of Tax Collected at Source.
- Schedule GST: Summary of turnover as per GST returns (mandatory to match with turnover declared in ITR).
Due Date for Filing ITR-4 for AY 2025-26 (FY 2024-25)
For the Assessment Year 2025-26 (i.e., for income earned during the Financial Year April 1, 2024, to March 31, 2025), the due date for filing ITR-4 is September 15, 2025. This applies to individuals, HUFs, and partnership firms whose accounts are not required to be audited.
- Note: The Income Tax Department recently extended this deadline from July 31, 2025, to September 15, 2025, for AY 2025-26. If a tax audit is required (i.e., if you declare lower than presumptive profit and your income exceeds basic exemption limit, or turnover/gross receipts exceed specific limits), then the due date is October 31, 2025, and you would likely need to file ITR-3.
How to File ITR-4 Online
The most common method is online through the official Income Tax e-filing portal.
Visit the Income Tax e-filing Portal
Go to www.incometax.gov.in.
Log in
Use your User ID (PAN), password, and captcha.
Navigate to E-File
Go to “e-File” > “Income Tax Returns” > “File Income Tax Return.”
Select Assessment Year
Choose “Assessment Year 2025-26.”
Select Filing Mode
Choose “Online.” (Offline utility is also available).
Select Status
Choose “Individual,” “HUF,” or “Firm.”
Select ITR Form
Choose “ITR-4 (Sugam).”
Select Reason for Filing
Choose the applicable reason (e.g., “Taxable income is more than the basic exemption limit”).
Proceed with Online Filing
- Many details (personal, pre-filled income/TDS from AIS/26AS) will be automatically populated. Verify them carefully.
- Enter details of your business/profession, turnover/gross receipts, and declare your presumptive income.
- Fill in other income details (salary, house property, other sources).
- Enter details of deductions and exemptions (if applicable under the old tax regime).
- Provide details of all active bank accounts.
Compute Tax
The system will calculate your tax liability or refund.
Preview and Submit
Review the entire form for accuracy.
E-Verify Your Return
This is essential for your filing to be complete. You can use Aadhaar OTP, Net Banking, Demat account, or Bank ATM for e-verification.
ITR-4 simplifies tax compliance for many small businesses and professionals by removing the need for extensive accounting. However, it’s crucial to understand its applicability and limitations. If your income or business structure is complex, or you are unsure about eligibility, consult our tax experts is highly recommended.