ITR-4 Sugam — Presumptive Tax, No Books

A resident individual, HUF or firm (other than an LLP) with total income up to Rs 50 lakh whose income comes from a presumptive business (44AD), a presumptive profession (44ADA) or goods transport (44AE), optionally along with salary/pension, one house property and income from other sources such as interest and dividends. For AY 2026-27 you may also have LTCG under Section 112A up to Rs 1.25 lakh with no carried-forward loss.

A resident partnership firm (not an LLP) can file ITR-4 for presumptive business income under Section 44AD or transport under 44AE. However, a firm cannot use Section 44ADA — the professional presumptive scheme is available only to resident individuals and HUFs. LLPs cannot file ITR-4 at all and must use ITR-5.

Section 44AD lets an eligible small business (individual, HUF or firm — not an LLP or company) with turnover up to Rs 2 crore declare 6% of digital receipts or 8% of cash receipts as net profit, without maintaining full books. If receipts and payments in cash do not exceed 5% of turnover, the limit rises to Rs 3 crore. It suits small traders, shopkeepers and contractors.

Yes, but with consequences. If you declare profit below 6% (digital) or 8% (cash) of turnover and your total income exceeds the basic exemption limit, you must maintain books and get a tax audit under Section 44AB. Once you opt out of 44AD after having opted in, you cannot re-enter the scheme for the next 5 assessment years.

The turnover limit is Rs 2 crore. It is enhanced to Rs 3 crore if aggregate cash receipts (and cash payments) do not exceed 5% of total turnover — encouraging digital transactions. Above these limits you cannot use 44AD or ITR-4 and must file ITR-3 with regular books.

Section 44ADA is available to specified professionals — doctors, lawyers, engineers, architects, accountants, interior designers, technical consultants and film artists — whose gross receipts do not exceed Rs 75 lakh a year (raised from Rs 50 lakh). Under 44ADA, 50% of gross receipts is deemed net profit. The professional must be a resident individual or HUF; partnership firms are not eligible.

Gross professional receipts must not exceed Rs 75 lakh for the year. The higher Rs 75 lakh threshold (up from Rs 50 lakh) applies only where cash receipts do not exceed 5% of total gross receipts; otherwise the effective limit stays at Rs 50 lakh. Above the limit you must use ITR-3 with actual books of account.

Section 44AE covers goods-carriage operators owning up to 10 vehicles at any time in the year. Income is deemed at Rs 1,000 per ton of gross vehicle weight per month for heavy goods vehicles (over 12 tonnes) and Rs 7,500 per vehicle per month for other vehicles, per vehicle for the months held. There is no turnover ceiling, but owning more than 10 vehicles disqualifies you.

Usually not. If you declare income at or above the prescribed presumptive rate (6%/8% for 44AD, 50% for 44ADA), no tax audit is needed even if income is above Rs 50 lakh (though then you cannot use ITR-4). A tax audit under Section 44AB becomes mandatory only if you declare less than the prescribed profit and your gross total income exceeds the basic exemption limit.

Switch to ITR-3 when you have capital gains beyond the Rs 1.25 lakh 112A limit, are a company director, hold unlisted equity shares, turnover exceeds Rs 2/3 crore (44AD) or receipts exceed Rs 75 lakh (44ADA), total income exceeds Rs 50 lakh, you want to carry forward business losses, or you opt out of presumptive taxation and maintain full books.

Only in a limited way. From AY 2026-27, ITR-4 allows long-term capital gains under Section 112A up to Rs 1.25 lakh from listed equity shares or equity mutual funds, provided you have no capital loss to carry forward or set off. Any other capital gains, or LTCG above Rs 1.25 lakh, require ITR-2 or ITR-3.

For non-audit taxpayers the due date to file ITR-4 for AY 2026-27 (FY 2025-26) is 31 August 2026 (extended from the usual 31 July for this year). Where a tax audit applies, the due date is 31 October 2026. A belated or revised return under Section 139(4)/(5) can be filed up to 31 December 2026 with late fee and interest.

A late-filing fee under Section 234F applies: Rs 5,000 if the return is filed after the due date, reduced to Rs 1,000 if total income does not exceed Rs 5 lakh. Interest under Sections 234A/B/C may also apply on any unpaid tax. If you miss even the 31 December belated deadline, you can only file an updated return (ITR-U) within 48 months of the end of the assessment year.

Yes, but with relief on instalments. Taxpayers under Section 44AD or 44ADA pay their entire advance tax in a single instalment by 15 March of the financial year, instead of the usual four quarterly instalments. Missing this attracts interest under Section 234C. Any remaining balance is paid as self-assessment tax before filing ITR-4.

Log in at incometax.gov.in, choose ITR-4 under e-file, and use the prefilled data. Enter your turnover/gross receipts, confirm the presumptive income (6%/8% or 50%), add salary, house-property and other-source income, verify tax credits against Form 26AS and AIS, pay any self-assessment tax, submit and e-verify within 30 days using Aadhaar OTP. TaxClue can prepare and file it for you.

You mainly need your PAN and Aadhaar, bank details, total turnover or gross-receipt figures, Form 26AS and AIS/TIS, any Form 16 for salary, interest and dividend statements, GST turnover if registered, and advance/self-assessment tax challans. Because it is presumptive, you do not upload detailed books, but keep records to support the turnover declared.