What is ITR-4 Form?
ITR-4, also known as Sugam Form, is used by resident individuals, HUFs, and firms (other than LLPs) who have opted for presumptive income scheme under Sections 44AD, 44ADA, or 44AE.
Who Should File ITR-4?
You should file ITR-4 if:
- You are an Individual, HUF, or Partnership Firm (not LLP)
- You are a Resident of India
-
You have opted for Presumptive Taxation under:
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Section 44AD – Small business with turnover up to Rs. 2 crore
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Section 44ADA – Professionals like doctors, lawyers, freelancers with income up to Rs. 50 lakh
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Section 44AE – Owners of goods carriages (up to 10 vehicles)
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- You have income from salary or pension
- You have income from one house property
- You have income from other sources like interest or family pension
Who Cannot File ITR-4?
You cannot file ITR-4 if:
- Your total income exceeds Rs. 50 lakh
- You have more than one house property
- You have capital gains income
- You earn commission, brokerage, or speculative business income
- You have income from Lottery, Racehorses, or Crypto
- You hold foreign assets or foreign income
- You are a Director in a company
- You have unlisted shares
- You want to claim regular business expenses beyond presumptive scheme
Presumptive Taxation Scheme Overview
| Section | Applicable To | Presumptive Income Calculation |
|---|---|---|
| Section 44AD | Businesses with turnover up to Rs. 2 crore | 6% of digital turnover or 8% of cash turnover |
| Section 44ADA | Professionals with income up to Rs. 50 lakh | 50% of gross receipts |
| Section 44AE | Goods vehicle owners with up to 10 vehicles | Fixed profit per vehicle per month as per income tax rules |
Documents Required for Filing ITR-4
- PAN and Aadhaar Card
- Bank account details
- Form 16 (if salaried)
- Form 26AS and AIS report
- Gross turnover or receipts summary
- Vehicle details (for Section 44AE)
- Rental and interest income details (if applicable)
- Advance tax or self-assessment challan details
Structure of ITR-4 Form
| Section | Description |
|---|---|
| Part A | General information |
| Part B – Gross Total Income | Salary, house property, and other income |
| Part B – Total Income | Deductions and taxable income |
| Part B – Tax Computation | Final tax liability |
| Schedule BP | Business income under presumptive taxation |
| Schedule 44AD / 44ADA / 44AE | Presumptive income declaration |
| Schedule IT | Taxes paid like advance tax and self-assessment tax |
| Schedule TCS | Tax collected at source details |
| Schedule TDS | TDS on salary and non-salary income |
| Verification | Declaration and authentication |
Step-by-Step Process to File ITR-4
- Check eligibility under presumptive taxation
- Collect turnover or receipt summary
- Enter income details from salary, house property, and other sources
- Declare presumptive income under Section 44AD, 44ADA, or 44AE
- Claim deductions under Chapter VI-A if applicable
- Review TDS and tax paid details from Form 26AS
- Pay remaining tax if any using challan
- Submit and e-verify ITR within 30 days
Calculation of Presumptive Income
| Section | Turnover Example | Presumptive Profit Rate | Taxable Income |
|---|---|---|---|
| 44AD | Rs. 20,00,000 | 6% (digital receipts) | Rs. 1,20,000 |
| 44ADA | Rs. 30,00,000 | 50% of receipts | Rs. 15,00,000 |
| 44AE | 5 trucks for 12 months | Fixed per truck per month | As per prescribed rate |
Benefits of Filing ITR-4 Under Presumptive Scheme
- No need to maintain detailed books of accounts
- No requirement of profit and loss statement or balance sheet
- Audit not required if presumptive scheme conditions are followed
- Easy and fast filing process
- Helps in loan approvals and financial documentation
Deductions Allowed in ITR-4
You can claim deductions under Chapter VI-A, including:
- Section 80C – Investments like PPF, LIC, ELSS
- Section 80D – Medical insurance premium
- Section 80G – Donations
- Section 80TTA/80TTB – Savings/interest income deduction
Limitations of ITR-4
- Cannot declare income below presumptive limit unless maintaining books and opting for audit
- Cannot claim detailed business expenses
- Cannot carry forward business loss (except under Section 44AE)
- Not available for high-income taxpayers above Rs. 50 lakh
Verification and Submission Process
After filling the form:
- Cross-check income and tax calculation
- Submit return online
- Complete e-verification using Aadhaar OTP, net banking, or EVC
- Keep acknowledgment for records
Common Mistakes to Avoid in ITR-4 Filing
- Declaring turnover incorrectly
- Mismatch in Form 26AS and actual income
- Forgetting to verify ITR after submission
- Claiming deductions not allowed under presumptive scheme
- Selecting wrong section (44AD instead of 44ADA or vice versa)
Reasons to File ITR-4 on Time
- Avoid penalty for late filing
- Enable smooth loan and financial approvals
- Carry forward benefits under presumptive scheme
- Avoid notice and compliance issues
Certification
