ITR-4 Form for AY 2025-26: Who is it for and How to File?
- PRITI SIRDESHMUKH
- Aug 29
- 8 min read
The ITR-4 form, also known as Sugam, is for resident individuals, Hindu Undivided Families (HUFs), and partnership firms that choose the presumptive taxation scheme. This simplified scheme applies to certain business or professional incomes. This guide explains who can use ITR-4, who cannot, how the presumptive scheme works, the documents you'll need, and the steps to file it for the Assessment Year 2025-26.
Table of Contents
Who is Eligible to File ITR-4?
Who is Eligible to File ITR-4?
You should know that the ITR-4 applicability extends to specific taxpayers who meet certain conditions. Below is a quick checklist to see if you are eligible to file ITR-4.
✅ Residential Status: You must be a Resident Individual, a Hindu Undivided Family (HUF), or a Partnership Firm (other than a Limited Liability Partnership - LLP).
✅ Total Income: Your total income for the financial year must not be more than ₹50 lakh.
✅ Income Source: Your income must come from a business or profession where profits are calculated on a presumptive basis under Sections 44AD, 44ADA, or 44AE of the Income Tax Act.
✅ Other Permitted Incomes: You can also have income from salary or pension, one house property, agricultural income up to ₹5,000, and other sources like interest from savings accounts or family pensions.
If you meet these criteria, you can simplify your tax compliance and file your income tax return using the ITR-4 form. You can find more information on the official Income Tax Department website.
Understanding the Presumptive Taxation Scheme for ITR-4 Filers
The presumptive taxation scheme is a key feature for anyone considering the ITR-4 form, as it is designed exclusively for those who adopt this method. This scheme allows you to declare income at a prescribed rate, which simplifies the process of calculating your tax liability without needing to maintain detailed books of account. This information is updated as per the Finance Act 2023. The scheme is broken down into three main sections.
For Small Businesses - Section 44AD
Section 44AD is for small businesses. The presumptive taxation scheme under this section is available if your total turnover or gross receipts for the year are up to ₹2 crore. The limit increases to ₹3 crore if your cash receipts are not more than 5% of the total turnover. Your income is then presumed based on a percentage of your turnover.
Receipt Type | Presumptive Income Rate |
Cash Receipts | 8% of Turnover |
Digital/Banking Receipts | 6% of Turnover |
For Specified Professionals - Section 44ADA
Section 44ADA applies to resident individuals engaged in certain specified professions. This includes professionals in the following fields:
Legal
Medical
Engineering or Architectural
Accountancy
Technical Consultancy
Interior Decoration
To use this scheme, your total gross receipts must not exceed ₹50 lakh. This limit is raised to ₹75 lakh if cash receipts are 5% or less of the total receipts. Under this section, your income is presumed to be a flat 50% of your total gross receipts.
For Goods Carriage Businesses - Section 44AE
Section 44AE is designed for taxpayers who are in the business of plying, hiring, or leasing goods carriages. You can use this scheme if you own not more than ten goods vehicles at any time during the year. Income is calculated on a presumptive basis per vehicle, per month, which simplifies tax calculation for small transport operators. For heavy goods vehicles, income is presumed at ₹1,000 per ton of gross weight per month, while for other vehicles, it's a flat ₹7,500 per vehicle per month.
Who is NOT Eligible to File ITR-4?
It's just as important to know who cannot file ITR-4 to avoid filing an incorrect return. Certain conditions make you ineligible for the Sugam form.
❌ Total Income Exceeding ₹50 Lakh: If your total income from all sources is more than ₹50 lakh, you cannot use ITR-4. In such cases, you will likely must file ITR-3.
❌ Residential Status: Non-Residents and Residents but Not Ordinarily Residents (RNOR) are not eligible.
❌ Company Director: If you are a director in any company, you cannot file ITR-4.
❌ Holding Unlisted Equity Shares: Individuals who have held unlisted equity shares at any time during the financial year are ineligible.
❌ Certain Income Sources: You cannot use ITR-4 if you have income from more than one house property, capital gains (with some exceptions), or winnings from lotteries or horse races.
❌ Agricultural Income: If your agricultural income exceeds ₹5,000, ITR-4 is not the correct form.
You can check the official government portal for more details on different ITR forms.
ITR-4 vs. ITR-3: What's the Key Difference?
A common point of confusion for taxpayers is choosing between ITR-3 and ITR-4. The ITR-3 vs ITR-4 choice depends mainly on whether you opt for the presumptive taxation scheme. ITR-4 is specifically for those who use the presumptive scheme, while ITR-3 is for individuals and HUFs with income from a business or profession who do not opt for this scheme and must maintain regular books of accounts.
Basis of Comparison | ITR-4 (Sugam) | ITR-3 |
Primary User | Individuals, HUFs, and firms using the presumptive scheme (Sections 44AD, 44ADA, 44AE). | Individuals and HUFs with business/professional income not under the presumptive scheme. |
Income Calculation | Income is presumed at a fixed rate (e.g., 6%/8% or 50%) of turnover/receipts. | Actual income and expenses are calculated, and profit or loss is determined. |
Turnover Limit | Applicable for businesses up to ₹2 Cr/₹3 Cr and professionals up to ₹50 Lakh/₹75 Lakh. | No specific turnover limit is prescribed for filing this form. |
Books of Accounts | Not required to be maintained. | Mandatory to maintain detailed books of accounts. |
Documents Required to File ITR-4
Having the right documents for ITR-4 is crucial for a smooth filing process. Before you start, gather all necessary paperwork to ensure you report everything accurately. Here is a simple ITR-4 checklist of the essential documents you will need.
Basic Documents:
PAN Card
Aadhaar Card
Income Documents:
Bank Statements to verify receipts.
Form 16 if you also have salary income.
Rental agreements and rent receipts if you have rental income.
Tax Credit and Information Documents:
Form 26AS to verify TDS and TCS credits.
Annual Information Statement (AIS) for a comprehensive view of your financial transactions.
Deduction Proofs:
Receipts for investments made under Section 80C, like LIC premiums or PPF.
Donation receipts for claiming deductions under Section 80G.
Step-by-Step Guide to Filing ITR-4 Online
Filing ITR-4 online is a straightforward process on the government's e-Filing portal. The ITR-4 filing process is designed to be user-friendly, especially with pre-filled data. Here’s how to file ITR-4 online.
Step 1: Log in to the e-Filing Portal
Visit the official income tax e-filing website and log in using your PAN as the user ID and your password.
Step 2: Select the ITR Form
On your dashboard, navigate to 'e-File' > 'Income Tax Returns' > 'File Income Tax Return'. Select the Assessment Year as 2025-26 and choose 'Online' as the mode of filing. Select ITR-4 from the list.
Step 3: Confirm Pre-filled Data
The portal will present a form with much of your personal and tax information already filled in from your PAN, Aadhaar, and previous returns. Carefully review and confirm these details.
Step 4: Enter Business Income Details
Move to the 'Schedule BP' section. Here, you need to provide the details of your business or professional income under the relevant presumptive scheme (44AD, 44ADA, or 44AE). Enter your gross turnover or receipts.
Step 5: Disclose Financial Particulars
You must provide certain financial details of your business, such as total creditors, debtors, stock-in-trade, and cash in hand. You also need to report GSTIN and turnover as per GST returns, if applicable.
Step 6: Verify and Submit
After filling in all required schedules, preview your return. Once you are sure all details are correct, proceed to verification. You can e-verify your return instantly using an Aadhaar OTP, which is the quickest and easiest method. After successful verification, your ITR-4 will be submitted.
Conclusion
Filing the ITR-4 correctly is a great way for small businesses and professionals to simplify their tax compliance. This form, designed for the presumptive taxation scheme, reduces the burden of maintaining extensive account books. It is essential to carefully check the eligibility criteria for AY 2025-26 to ensure it's the right form for you. For a completely seamless and accurate filing experience, you can get expert help from TaxBuddy.
FAQs
Q1. Can a freelancer file ITR-4?
Yes, a freelancer can file ITR-4 if they are a resident individual, their gross receipts are not more than ₹75 lakh, and they opt for the presumptive taxation scheme under Section 44ADA.
Q2. What is the due date for filing ITR-4 for AY 2025-26?
The due date for filing ITR-4 for AY 2025-26 has been extended to September 15, 2025.
Q3. Can I file ITR-4 if I have salary income?
Yes, you can file ITR-4 if you have salary income, as long as your total income does not exceed ₹50 lakh and your business/profession income is under the presumptive scheme.
Q4. Do I need to pay advance tax if I opt for the presumptive scheme?
Yes, if you opt for the presumptive scheme under Section 44AD or 44ADA, you are required to pay the entire amount of advance tax in a single installment on or before the 15th of March of the financial year.
Q5. What happens if I don't file ITR-4 by the due date?
Filing after the due date results in a late filing fee under Section 234F. The fee is ₹5,000, but it's reduced to ₹1,000 if your total income is below ₹5 lakh. You may also have to pay interest on any outstanding tax liability.
Q6. Is a tax audit required for ITR-4 filers?
No, a tax audit is generally not required for those filing ITR-4 because the presumptive scheme relieves taxpayers from the need to maintain detailed books of account and get them audited.
Q7. Can I claim deductions like 80C in ITR-4?
Yes, you can claim deductions under Chapter VI-A, such as those under Section 80C, 80D, etc., even if you file ITR-4 under the presumptive taxation scheme.
Q8. How do I choose between the new and old tax regimes in ITR-4?
Taxpayers with business income can choose between the new and old tax regimes. To opt for the old regime and claim various deductions, you must file Form 10-IEA before filing your ITR. If you don't file this form, you will be taxed under the new tax regime by default.
Q9. Can a person earning commission income file ITR-4?
No, a person whose income is in the nature of commission or brokerage cannot use the presumptive scheme under Section 44AD and, therefore, cannot file ITR-4 for that income.
Q10. Do I need to maintain books of accounts if I file ITR-4?
No, one of the main advantages of filing ITR-4 under the presumptive scheme is that you are not required to maintain detailed books of account for your business or profession.
Q11. Can I file ITR-4 if I have rental income?
Yes, you can file ITR-4 if you have rental income from one house property. If you own more than one house property, you are not eligible to file ITR-4.
Q12. Can I file ITR-4 if I have minor capital gains?
Generally, ITR-4 is not for taxpayers with capital gains. However, an exception allows you to file ITR-4 if you have long-term capital gains under section 112A up to Rs. 1.25 lakhs and no other capital gains.
Q13. What is Form 10-IEA and is it related to ITR-4?
Form 10-IEA is a declaration that a taxpayer with business income must file to choose the old tax regime over the new default regime. If you want to claim deductions available in the old regime while filing ITR-4, you must submit this form first.
Q14. My turnover is more than ₹2 crore but less than ₹3 crore. Can I file ITR-4?
Yes, you can file ITR-4 under Section 44AD if your turnover is between ₹2 crore and ₹3 crore, provided that your receipts in cash do not exceed 5% of your total turnover for the year.
Q15. Can a partner in a firm file ITR-4 for their personal income?
A partner can file ITR-4 for their personal income, provided their income includes profits from a firm that has opted for presumptive taxation. However, they must meet all other eligibility criteria for ITR-4.
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