- Overview
- Who Can File ITR-4?
- What’s New This Year?
- Who Cannot Use ITR-4?
- Key Structure of ITR-4
- The Presumptive Taxation Advantage
- Important Considerations
- Why Choose ITR-4?
- Final Thoughts
Not every taxpayer is running a corporate empire. Some are solopreneurs, shopkeepers, professionals, freelancers, or transporters — running small yet thriving businesses with humble turnovers and dreams to grow.
And for them, the Income Tax Department rolled out ITR-4 Sugam.
Easy to file, easier to comply with — if your income is simple, your ITR should be too!
Let’s decode it.
Who Can File ITR-4?
ITR-4 is applicable to Individuals, HUFs, and Firms (excluding LLPs) whose income includes:
- Business income under Section 44AD (small traders, shopkeepers, etc.)
- Professional income under Section 44ADA (doctors, CAs, architects, etc.)
- Transporters under Section 44AE (own ≤ 10 goods vehicles)
- Total income ≤ INR 50 lakh
- Income from only one house property
- Other sources like interest, family pension, etc.
Think of ITR-4 as the “no-frills” return form — quick, clean, and built for India’s real economic backbone: small businesses and professionals
What’s New This Year?
Starting from Assessment Year 2025–26, individuals with Long-Term Capital Gains (LTCG) up to INR 1,25,000 from:
- Listed equity shares, or
- Equity-oriented mutual funds
can now report such gains in ITR-4 (Sugam)—provided all other eligibility conditions are met.
Who Cannot Use ITR-4?
You cannot use ITR-4 if:
- Total income exceeds INR 50 lakh
- You earn capital gains or foreign income
- You hold unlisted equity shares
- You’re a company director
- You have more than one house property
- Your agricultural income > INR 5,000
- You’re liable for audit under Section 44AB
- You earn from speculative business, commission, or brokerage
- You own foreign assets or signatory to foreign accounts
Key Structure of ITR-4
ITR-4 is designed for ease, with limited schedules and smart summarization:
- Part A – General Information
Basic details like PAN, Aadhaar, filing status, and nature of business. - Part B – Income Computation
- Presumptive income under sections 44AD, 44ADA, or 44AE
- One house property income
- Income from other sources (FDs, savings interest, etc.)
- Part C – Deductions and Taxable Income
Chapter VI-A deductions (like 80C, 80D, 80G, etc.) - Part D – Tax Details
Tax computation, prepaid taxes (TDS, advance tax) - Bank Details and Verification
Mandates disclosure of all active bank accounts.
The Presumptive Taxation Advantage
Presumptive schemes are the cornerstone of ITR-4:
Section 44AD
- Applicable to small businesses
- Presumes 8% (or 6% for digital receipts) of turnover as income
- No books or audit required
Section 44ADA
- Applicable to professionals
- Presumes 50% of gross receipts as income
- Ideal for consultants and freelancers with low expenses
Section 44AE
- For transporters owning ≤10 goods vehicles
- Income calculated on a per-vehicle basis
Important Considerations
- Digital payments matter – 6% income assumption applies
- If you declare income lower than presumptive rates, you may need to maintain books and get an audit
- Choosing presumptive taxation locks you in for 5 years (under 44AD)
- Ensure consistency with AIS/TIS and Form 26AS
- Mismatch or misreporting can lead to scrutiny—even with a “simplified” form
Why Choose ITR-4?
- Time-saving: Fewer schedules, minimal documentation
- Audit-free: If within limits
- Ideal for: Solopreneurs, small traders, consultants, local businesses, and drivers
- Avoids the complexity of ITR-3 or ITR-5
Final Word
ITR-4 is a blend of simplicity with structure, a thoughtful blend to help India’s small earners stay compliant without chaos.
It is built for the traders, creators, and professionals keeping India running. It encourages voluntary compliance by reducing the burden for small taxpayers, while still offering sufficient transparency for the tax department.
If your income is straightforward and fits within the presumptive taxation scheme, this is your go-to form. But remember, choosing the right form is critical—filing under the wrong ITR can delay refunds, trigger scrutiny, or even result in penalties.
Pro Tip:
Even if you’re under presumptive taxation, don’t ignore documentation.
Maintain basic records, payment logs, and invoices — especially if you go digital.
They’re your armor if scrutiny knocks on your door.
Coming Up Next – Day 12: Unlocking the next form in your tax toolkit!
Stay tuned!
