The Income Tax Department has released the latest ITR forms for Assessment Year 2025–26, and if you’re a small business owner, freelancer, or professional with relatively simple income, ITR-4 (Sugam) might be the right form for you.

ITR-4 (Sugam) is specially designed for Resident Individuals, Hindu Undivided Families (HUFs), and Firms (other than LLPs) who earn income from Business and Profession computed under the presumptive taxation scheme of the Income Tax Act — specifically under Sections 44AD, 44ADA, or 44AE.

What is ITR-4 (Sugam) Form?

ITR-4 Sugam is the Income Tax Return form notified for Resident Individuals, HUFs, and Firms (except LLPs) who have opted for the presumptive income scheme under:

Section 44AD – for small businesses
Section 44ADA – for professionals
Section 44AE – for transporters

The key advantage of ITR-4 is that you don’t need to maintain books of account or undergo audit, provided you fulfill the prescribed conditions. The form is “SUGAM” (simple) and meant for those who want ease of compliance.

Official Notification: [CBDT Notification No. 16/2024 dated 24-01-2024]

Who Should File ITR-4?

ITR-4 is applicable to you if:

Criteria	Conditions
Residency	You are a Resident Individual, HUF, or Firm (not LLP)
Total Income	Total income is up to ₹50 lakh
Income Type	You have income from business or profession and you have opted presumptive taxation under (Sections 44AD, 44ADA, 44AE)
Other Income	You may also have income from salary, one house property, or other sources (not including lottery, racehorse, etc.)

Who Cannot File ITR-4?

You CANNOT file ITR-4 if:

You are a Non-Resident or RNOR
You are a Director in a company
You hold unlisted equity shares
You have capital gains (short/long term)
Long-term capital gain u/s 112A exceeding Rs. 1.25 lakhs
You have foreign income or foreign assets
You want to claim DTAA relief
Your agricultural income > ₹5,000
You have more than one house property
Your turnover exceeds ₹2 crore (business) or receipts exceed ₹50 lakh (profession)
You have income from speculative business or options trading

In such cases, use ITR-3 or ITR-2 as applicable.

Comparison Table: ITR-4 vs. ITR-1, ITR-2, ITR-3

Feature Form	ITR-1 (Sahaj)	ITR-2	ITR-3	ITR-4 (Sugam)
Who Can File?	Resident Individuals (Salaried)	Individuals & HUFs	Individuals/HUFs with business/profession	Resident Individuals, HUFs, Firms (other than LLPs)
Total Income Limit	≤ ₹50 lakh	No limit	No limit	≤ ₹50 lakh
Business Income	Not allowed	Not allowed	Business/Profession (Regular scheme)	Only under Presumptive Tax (44AD, 44ADA, 44AE)
Professional Income	Not allowed	Not allowed	Regular income from profession	Presumptive income under 44ADA only
Capital Gains	Not allowed	Allowed	Allowed	Not allowed
Foreign Assets	Not allowed	Allowed	Allowed	Not allowed
Unlisted Shares	Not allowed	Allowed	Allowed	Not allowed
Director in Company	Not allowed	Allowed	Allowed	Not allowed
Salary Income	Allowed	Allowed	Allowed	Allowed
House Property	1 Property only	Multiple properties	Multiple properties	Only 1 property
Other Sources	Allowed (excl. racehorse/lottery)	Allowed (incl. racehorse/lottery)	Allowed (incl. racehorse/lottery)	Allowed (excl. racehorse/lottery)
Audit Required?	Never	No	Yes (if applicable under Section 44AB)	Not required (unless declaring lower income)
Books of Account?	Not required	Not required	Required (for business/profession)	Not required (under presumptive scheme)
Presumptive Scheme?	Not applicable	Not applicable	Optional	Mandatory if chosen under 44AD/ADA/AE
Form Simplicity	Very Simple	Moderate	Complex	Simple
Best For	Salaried, one house property	Capital gains, foreign income, multiple houses	Professionals, Business owners (non-presumptive)	Small businesses & professionals under presumptive tax

Notes:

If a person opts out of presumptive taxation under 44AD, they cannot opt back in for 5 years (as per Section 44AD(4)).
ITR-4 cannot be filed by LLPs, even if they meet all other presumptive criteria.
ITR-4 is not meant for freelancers earning from platforms like YouTube, Upwork, etc., unless they opt for presumptive under 44ADA.

Income Covered Under ITR-4

ITR-4 is suitable for the following heads of income:

Business Income under Section 44AD
Professional Income under Section 44ADA
Transport Income under Section 44AE
Salary/Pension
One House Property
Other Sources (Interest, dividends)

Presumptive Taxation Scheme: Detailed Section-wise Guide

Section 44AD – Small Businesses

Applicable for residents engaged in business (not profession)
Turnover ≤ ₹2 crore
Declare income @:
- 8% of gross receipts (cash mode)
- 6% if received digitally
No books of accounts required under Section 44AA
No audit under Section 44AB

Example: A kirana shop with turnover of ₹30 lakh. Can declare ₹2.4 lakh (8%) or ₹1.8 lakh (6%) as income.

Section 44ADA – Professionals

Applies to specified professionals (lawyers, CAs, doctors, architects, etc.)
Receipts ≤ ₹50 lakh
Declare income @ 50% of gross receipts
No audit or books of account

Example: A freelance architect earning ₹35 lakh can declare ₹17.5 lakh under presumptive income.

Section 44AE – Transporters

For owning ≤10 goods vehicles
Income deemed @ ₹1,000 to ₹7,500 per vehicle per month (based on tonnage)
Applicable to any person engaged in goods transport business

Example: Owns 5 heavy goods vehicles → Income = 5 × ₹7,500 × 12 = ₹4.5 lakh/year

What’s New in ITR-4 for AY 2025–26 (July 2024 Updates)

Digital vs. Cash Receipts Disclosure (for 44AD) improved
Validation Mechanisms added – Incorrect presumptive claims flagged during filing
Updated JSON Utility – Easy offline filing
AIS/TIS Auto-fill Integration – Reduces data entry
Bank Details Validation added – including primary account for refund
Enhanced instructions for 44ADA and 44AE with GST mapping support.

Required Documents & Information Checklist

Before filing, keep the following ready:

Personal Details

PAN, Aadhaar, Mobile No., Email ID
Residential status and address

Income Details

Business/profession turnover
Vehicle ownership proof (for 44AE)
Salary slip/Form 16 (if applicable)
Interest from banks, dividends

Tax Details

Advance Tax challans
Self-assessment tax challans
TDS from 26AS
AIS/TIS statements

Other

Bank account number with IFSC
Passport details (if international travel done)
Aadhaar linking status
Investment proofs (80C, 80D, etc.)

Step-by-Step Filing Process (Portal or Offline)

Filing Online on Portal

Login to https://www.incometax.gov.in
Go to e-File → Income Tax Return → File ITR
Select AY 2025–26 and ITR-4
Choose filing mode: Online or Offline (JSON Upload)
Fill all 5 parts:
- Part A: General
- Part B: Gross Total Income
- Schedule BP: Business/Profession
- Schedule 80G, 80C, etc.
- Part D: Tax computation
Validate and Preview
Submit and e-verify using Aadhaar OTP or Net Banking

Filing Using Utility (Offline)

Download JSON Utility from portal
Fill, generate JSON
Upload on portal

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Due Dates & Extension (AY 2025–26)

Type	Date
Normal Due Date	31st July 2025
Belated Return	31st December 2025
Revised Return	31st December 2025

As per the latest CBDT update, the due date for non-audit cases has been extended to 15 September 2025 (from 31 July 2025) under Section 139(1).

Penalties, Interest, and Late Filing Fees

Delay	Income > ₹5 lakh	Income ≤ ₹5 lakh
Filed after due date (before 31 Dec)	₹5,000	₹1,000
Filed after 31 Dec	₹5,000 + Interest u/s 234A/234B/234C

Also, losses cannot be carried forward if return filed late.

Conclusion – Should You File ITR-4?

The ITR-4 Sugam Form is a boon for small businesses and professionals who want a hassle-free compliance experience. With presumptive taxation, the burden of audit and maintaining books is eliminated, provided you meet the eligibility conditions.

Make sure to file before the due date to avoid penalties. The new ITR-4 has integrated checks and auto-fill options that make filing easier than ever.

FAQs on ITR-4 Filing

Q1. Can salaried individuals use ITR-4?

Yes, if they have presumptive business/profession income and total income ≤ ₹50 lakh.

Q2. Can I switch from 44AD to normal scheme?

You can, but after opting out of 44AD, you cannot opt-in again for next 5 years (Section 44AD(4)).

Q3. Do I need to maintain books of account in ITR-4?

No. That’s the benefit of presumptive taxation.

Q4. Can I claim 80C, 80D, HRA, etc. in ITR-4?

Yes. Deductions under Chapter VI-A are available.

Q5. Can I file ITR-4 if I received cash above ₹2 crore?

No. You exceed turnover limits for 44AD.

Q6. Is GST registration mandatory to file ITR-4?

No. But if you are registered under GST, mention GST number in Schedule BP.

Legal & Official Reference Links

Written by Mahboob Gaddi and Farman Ahmad | Founders, Lawgical Search

How to File ITR-4 for AY 2025–26 Presumptive Taxation, Eligibility, Latest July 2024 Updates & FAQs?

Introduction – Understanding ITR-4 (Sugam) for AY 2025–26