For Small Businesses & Professionals opting for presumptive income. No books of accounts, no audit required. Fast & Easy compliance.
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ITR-4, also known as Sugam, is the Income Tax Return form meant for Individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) opting for the presumptive income scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act, 1961. This scheme allows eligible taxpayers to declare income at a prescribed rate without maintaining detailed books of accounts. ITR-4 is designed to simplify return filing for small taxpayers with consistent income sources and no complex financial dealings.
ITR-4, also known as Sugam, is the Income Tax Return form meant for individuals, HUFs, and firms (other than LLPs) opting for presumptive income scheme under Sections 44AD, 44ADA, and 44AE. This allows taxpayers to declare income at prescribed rates without maintaining detailed books of accounts.
The form covers income from business, profession, salary/pension, one house property, and other sources (excluding lottery or racehorse income). Total income must not exceed ₹50 lakhs and turnover must remain within prescribed presumptive taxation limits.
ITR-4 is suitable for taxpayers meeting the following criteria:
Example: Small shop owner, freelancer, taxi operator.
Note: File ITR-3 or ITR-5 instead.
Calculate tax on estimated income without maintaining books.
Traders, Manufacturers, Retailers
Turnover up to ₹2 Cr (₹3 Cr if digital)
Doctors, Lawyers, Techies, etc.
Receipts up to ₹50 L (₹75 L if digital)
Goods Carriage Owners
Up to 10 vehicles owned
To file ITR-4 (Sugam), a taxpayer must meet specific eligibility conditions laid out under the Income Tax Act, 1961, particularly related to the presumptive income scheme. This form is designed to ease the compliance burden for small taxpayers, but it is available only to those who qualify under the following criteria:
Below are the eligibility conditions for filing ITR-4:
• Total income should not exceed ₹50 lakhs during the financial year.
If any of these conditions are not met, the taxpayer must use another ITR form like ITR-3 or ITR-5 depending on the case.
Though ITR-4 (Sugam) is a simplified form for taxpayers under the presumptive income scheme, it still requires key documents for accurate reporting. These documents help validate your income, deductions, and tax payments to ensure compliance with the Income Tax Act. Here's a checklist:
Essential identification documents for every taxpayer. Must be linked for filing and e-verification.
Reflects TDS deducted, advance tax paid, and financial transactions. Used for income cross-verification.
Include IFSC, account number, and account type for refund processing. One account must be primary.
To report salary income and compute total income, even if primary income is presumptive.
Gross receipts during the financial year. Basis for presumptive income calculation under Sections 44AD/44ADA.
LIC, PPF, NSC, ELSS or health insurance receipts if claiming deductions under 80C–80D.
Required for claiming education loan or home loan interest deductions.
Proof of tax paid before filing return. Includes Challan 280 receipts.
Filing ITR-4 (Sugam) is a streamlined process for individuals and HUFs opting for presumptive taxation under Section 44AD, 44ADA, or 44AE. Follow the steps below to ensure an error-free and timely filing for AY 2025–26:
Gather key documents such as PAN, Aadhaar, Form 26AS, AIS, bank details, proof of presumptive income, investment proofs (if applicable), and tax payment challans.
Visit incometax.gov.in, click on “Login”, and use your PAN/Aadhaar and password. New users must register before logging in.
Choose “File Income Tax Return” → Select Assessment Year 2025–26 → Select “ITR-4” under Individual or HUF → Proceed in online mode. Enter personal info, filing status, and bank account details.
In the "Income Details" section, declare your gross turnover or receipts and apply the presumptive rate (8%/6% for business or 50% for professionals) as per applicable section.
Enter eligible deductions under Chapter VI-A (Sections 80C, 80D etc.), if applicable. Validate all entries using system checks to avoid errors before submission.
Submit the return online and complete e-verification through Aadhaar OTP, net banking, or EVC. E-verification must be done within 30 days to complete filing.
The ITR-4 form is specifically designed for taxpayers who opt for the Presumptive Taxation Scheme under sections 44AD, 44ADA, and 44AE of the Income Tax Act. Apart from business or professional income, it also accommodates limited additional sources of income. Here’s a breakdown of what income sources can be reported under ITR-4:
Individuals or HUFs running small businesses can report their income under Section 44AD, declaring 8% of turnover (or 6% if digital). Under Section 44AE, those engaged in plying, hiring, or leasing goods carriages can declare a fixed presumptive income per vehicle per month. These schemes reduce compliance by not requiring detailed books of accounts or audits.
Professionals like doctors, lawyers, architects, and accountants earning gross receipts up to ₹50 lakh can file under Section 44ADA. They can declare 50% of gross receipts as income without maintaining detailed expense records. It simplifies tax reporting for small professionals while remaining compliant.
In addition to presumptive income, taxpayers may report salary or pension income, income from one house property, and interest from savings or fixed deposits. Capital gains, foreign income, speculative income, and multiple properties are not permitted under ITR-4.
If your income includes capital gains, foreign assets, multiple house properties, or does not fall under presumptive taxation, you must file another applicable ITR form such as ITR-3 or ITR-5.
Even under the presumptive taxation scheme, eligible taxpayers can claim deductions under Chapter VI-A of the Income Tax Act. However, business expenses cannot be claimed separately as presumptive income is treated as net income.
Taxpayers filing ITR-4 can claim the following deductions to reduce their taxable income:
80C – LIC, PPF, ELSS, tuition fees, etc.
80D – Health insurance premiums
80G – Donations to approved funds and charities
80TTA – Savings account interest
80U – Deduction for persons with disabilities
These deductions help significantly reduce overall tax liability while filing ITR-4.
Even without maintaining detailed books of accounts, eligible deductions under Chapter VI-A remain fully claimable.
These deductions are permitted even when income is computed under presumptive taxation.
Expenses such as rent, salaries, depreciation, travel, or utilities cannot be claimed separately under ITR-4. Presumptive income is deemed to be net of all expenses, eliminating the need for detailed accounting.
Taxpayers filing ITR-4 under the Presumptive Taxation Scheme enjoy significant compliance relief, especially in maintaining accounts and undergoing audits. However, certain conditions apply depending on turnover and type of income.
Under Sections 44AD, 44ADA, and 44AE, individuals opting for presumptive taxation are not required to maintain books of accounts as specified under Section 44AA. Since income is declared as a fixed percentage of gross receipts or turnover, there’s no need for ledgers, journals, or profit & loss statements, simplifying record-keeping.
As per Section 44AB, audit requirements do not apply to those declaring income under the presumptive scheme if they remain within the prescribed limits:
Turnover up to ₹2 crore (for businesses under 44AD)
Gross receipts up to ₹50 lakh (for professionals under 44ADA)
Not more than 10 vehicles owned (under 44AE)
However, if income is claimed lower than the prescribed percentage and exceeds the basic exemption limit, audit becomes mandatory.
Audit under Section 44AB may become applicable if:
Income is below 8% / 6% (business) or 50% (profession) and exceeds exemption limit
Taxpayer opts out of presumptive scheme after opting in (5-year restriction under 44AD)
Business or profession falls under non-eligible categories
In such cases, the taxpayer must maintain books of accounts and get them audited by a Chartered Accountant.
Filing ITR-4 seems simple, but minor errors can lead to notices, penalties, or rejection of your return. Below are frequent mistakes that taxpayers should avoid to ensure a smooth filing experience.
One of the most common issues is selecting the wrong ITR form. ITR-4 is only applicable for individuals, HUFs, and firms (excluding LLPs) who opt for presumptive income. Filing ITR-4 despite having capital gains, foreign income, or business income not covered under 44AD/44ADA will lead to rejection.
Filing your return is incomplete without e-verification. Failing to verify within 30 days (via Aadhaar OTP, Net Banking, or ITR-V) makes the return invalid. Always ensure you complete the e-verification process promptly.
Taxpayers often forget to disclose interest income from savings accounts or FDs, leading to mismatches with AIS/TIS data. Also, all active bank accounts must be reported in the return. Omitting such details can trigger scrutiny or reprocessing.
Avoiding these common mistakes ensures your ITR-4 is processed smoothly, reduces the risk of notices, and helps maintain long-term tax compliance.
We simplify ITR-4 filing through expert guidance, compliance assurance, and complete process management—so you file accurately and on time.
Get professional assistance from tax experts who guide you through eligibility checks, correct form selection, and accurate data entry—ensuring a smooth, hassle-free ITR-4 filing experience.
We ensure your return complies with all applicable provisions of the Income Tax Act, avoids common errors, and is filed within deadlines—reducing the risk of notices, penalties, or rejection.
From document collection and data validation to final submission and e-verification, we manage the complete ITR-4 filing lifecycle—so you can focus on running your business while we handle your taxes.
