The ITR-4 Filing Form, also called Sugam, is meant for taxpayers who opt for the presumptive income scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act. It is mainly for small businesses, professionals, and transporters covered under these sections. However, if your business turnover exceeds ₹2 crores, you’ll need to file ITR-3, and in some cases, ITR-5 may apply.
In this article, we’ll cover everything about ITR-4 applicability, due dates, and step-by-step ITR-4 filing for AY 2025–26.
For hassle-free filing, Filingwise offers expert ITR-4 return filing services to make the process smooth, accurate, and stress-free.
Latest Update: CBDT Notifies New ITR-4 Filing (Sugam) for FY 2024-25
1. Expanded Eligibility for Presumptive Taxation
Great news! From FY 2024-25, ITR-4 Filing can now be used even if you have LTCG (long-term capital gains) under Section 112A up to ₹1.25 lakh. Earlier, having capital gains forced you to file ITR-2. This update makes life easier for freelancers, small businesses, and investors with small capital gains
2. New Section for Reporting Exempt LTCG (Section 112A)
ITR-4 now has a dedicated section to report exempt LTCG under Section 112A. Taxpayers must provide details such as:
Sale consideration
Cost of acquisition
Exempt LTCG amount
3. Mandatory E-Filing of Form 10BA for Rent Deductions
If you’re claiming deductions for rent paid under Section 80GG, you must now file Form 10BA online along with your ITR.
Note: This benefit is not available if you already receive HRA under Section 10(13A) or if you have opted for the new tax regime (115BAC)
4. Section-wise TDS Reporting in Schedule TDS/TCS
The new ITR-4 Filing requires you to specify the exact section under which TDS was deducted. For example:
Section 194 → TDS on dividends
Section 194A → TDS on interest income
This helps ensure better accuracy and matches easily with your Form 16A or Form 26AS
5. Clear Prompts for Opting In/Out of New Tax Regime (115BAC)
The updated form now asks clear questions about your tax regime choice:
Did you opt for the new regime in AY 2024–25?
Do you want to continue or opt out in AY 2025–26?
If you filed ITR-1 or ITR-2 earlier but didn’t submit Form 10-IEA, you must now submit it for AY 2025–26 to opt out of the new regime. This must be done before the due date (u/s 139(1))
6. Faster Refunds with Pre-Validation
The new ITR-4 improves refund processing by requiring pre-validation of bank account details. Double-check your IFSC, account number, and bank selection to ensure quick and accurate refunds.
7. Clarified Rules for Non-Residents & Special Cases
Rule 12 has been updated to make tax filing conditions clearer for:
Non-residents
Individuals with business income, capital gains, or other specific income
This ensures better compliance and avoids confusion for taxpayers with special income situations
Presumptive Taxation Scheme (Simplified)
The Presumptive Taxation Scheme under the Indian Income Tax Act is designed to make tax filing easier for small taxpayers. Instead of maintaining detailed books of accounts, eligible individuals and businesses can declare income at a fixed rate and file their returns with less paperwork. This option is mainly covered under Sections 44AD, 44ADA, and 44AE of the Act.
Section 44AD: Applies to resident individuals, HUFs, and partnership firms (except LLPs) running certain small businesses. They can declare their income at a prescribed percentage instead of keeping full accounts.
Section 44ADA: Meant for resident professionals like doctors, lawyers, architects, and others listed in Section 44AA(1). They can also estimate their income under this scheme.
Section 44AE: Designed for those engaged in the transport business (plying, leasing, or hiring goods carriages). It allows individuals, HUFs, firms (excluding LLPs), and even non-residents to opt in, as long as they own no more than 10 goods vehicles during the year
Eligibility Criteria for Filing Income Tax Return ITR-4
Total Income should not exceed ₹50 lakh in a financial year.
You can use ITR-4 Filing if your income comes from any of these sources:
Salary or Pension
One House Property
Other Sources like interest income or family pension
Business income on a presumptive basis with turnover up to ₹2 crore (under Section 44AD)
Goods carriage business on a presumptive basis with up to 10 vehicles (under Section 44AE)
Profession on a presumptive basis with gross receipts up to ₹50 lakh (under Section 44ADA)
Important Notes:
When you file under presumptive taxation (Sections 44AD, 44AE, 44ADA), it is assumed that all expenses, depreciation, and deductions have already been adjusted.
If losses arise under Section 44AE, you’ll need to file ITR-5 instead.
If you’re clubbing income of a spouse, minor child, or any other person, you can still use ITR-4 only if their income also falls under the above categories
Non-Applicability of ITR-4 Filing (Sugam) Form
Not everyone can use the ITR-4 Filing (Sugam) form. It is not applicable for the following taxpayers:
1. Who cannot use ITR-4 Filing?
Directors of a company
Individuals who owned unlisted equity shares during the year
Taxpayers with foreign assets, bank accounts, or financial interests outside India
Persons with income from abroad
2. Types of income not allowed in ITR-4 Filing :
Business or professional income not under presumptive taxation (Sections 44AD, 44ADA, 44AE) — e.g., commission, brokerage, speculative, or agency income
Income from more than one house property
Capital gains (like sale of property or shares)
Income from lotteries, racehorses, etc.
Income taxed at special rates under Sections 115BBDA or 115BBE
Agricultural income above ₹5,000
Income that needs apportionment under Section 5A (for certain taxpayers in Goa & Kerala)
3. Claims not allowed in ITR-4 Filing :
Carry-forward or set-off of house property losses
Claiming foreign tax relief (Sections 9A, 90, 91)
Loss under Income from Other Sources
Deductions under Section 57 (except family pension)
TDS credit in another person’s name
Steps to Download ITR-4 Form Online
If you’re a freelancer, self-employed, or a small business owner filing under presumptive taxation, here’s how you can easily download the ITR-4 (Sugam) form:
- Visit the Income Tax e-Filing Portal – Head over to the official Income Tax Department website.
- Go to the “Downloads” Section – You’ll find it right on the homepage.
- Select ITR-4 Form – Pick the right Assessment Year and look for “ITR-4” under the Forms (ITR) section.
- Choose Your Format – Download the form in Excel, Java Utility, or JSON format as per your preference.
- Install Required Utilities – Make sure you have Excel or Java installed to open and use the form smoothly.
Want to avoid the hassle? With Filingwise, you can simplify the entire ITR-4 filing process with step-by-step guidance and expert support designed especially for freelancers and self-employed professionals. You can get Free Consultation with a CA to clear your doubts before filing your ITR.
