Step by Step Guide to File ITR 4 (Sugam) Form

2025-05-10

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The ITR 4 Form is for the taxpayers who have opted for the presumptive income scheme as per Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act. This form is also called Sugam form and is mandatory to be filled by taxpayers eligible for it.

However, for businesses exceeding turnover of Rs.2 Crores there is ITR-3. Also, ITR-5 may be required as applicable. Here, let’s find out the applicability of ITR 4:

Structure of ITR 4 Form (For AY 2025-26):

Part A:	Part B:	Part C:	Part D:
General Information	Gross total income from the five heads of income	Deduction and total taxable income	Tax computation and tax status

Schedule BP: Provide details of income from Business (*the form has been modified to include GST details)

Schedule IT: Flourish statement of payment of advance tax.

Schedule-TCS: Provide a statement of tax collected at source (TCS).

Schedule TDS1: Provide a statement of Tax Deducted at Source (TDS) on salary.

Schedule TDS2: Provide a statement of Tax Deducted at Source (TDS) on income except salary.

Schedule DI: Provide a statement of investments in the extended period.

Eligibility to File ITR-4:

ITR-4 is to be filed by individuals, HUFs and Partnership Firms who meet the following conditions :

Business income computed in accordance with special provisions under Sections 44AD and 44AE.
Income from Professional sources computed under Sections 44ADA
Income from one house property up to Rs 50 Lakh (excluding brought forward loss or loss to be carried forward under this head)
Income from salary/ pension up to Rs 50 Lakh
Income up to Rs 50 Lakh from other sources (excluding winning from lottery and income from race horses)

Note: Freelancers can also opt for this scheme if their gross receipts don’t exceed Rs 50 Lakh.

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Presumptive Taxation Scheme of Sections 44AD, 44AE and 44ADA

Section 44AD is available to individuals, HUFs or partnership firms.
1. Gross receipts or turnover of the firm should be less than ₹ 2 Crore
2. Applicant must be a resident of India
Section 44AE is allowed to all taxpayers - individuals, HUFs, companies and partnership firms.
1. You should be in the business of plying, leasing or hiring trucks
2. You should not own more than 10 goods carriages at any time during the year (including carriages taken on hire or on installments)
3. Section 44ADA is applicable only to a resident assessee, who is an individual, HUF or partnership firm and not LLP (Limited Liability Partnership Firm).

Eligible Professionals Under Section 44ADA

Interior decorations, Technical consulting, Engineering Accounting, Legal, Medical, Architecture and other professionals, as mentioned below:
- Movie artists includes an actor, producer, editor, director, art director, music director, dance director, singer, lyricist, story writer, screenplay or dialogue writer, cameraman, and costume designers
- Authorized representatives or persons who represent another person for a fee before a tribunal or any authority constituted under any law.
- Other notified professionals

How to file ITR-4 Form?

You can submit your ITR-4 Form in the following two ways:

Offline: One can file ITR offline by furnishing a physical paper form/ a bar-coded return, in return for an acknowledgement issued by the Income Tax Department. Filing income tax return offline is allowed under the following conditions:
1. The Individual is 80 years old or more.
2. The Individual’s income is less than Rs.5 Lakh.

Online: One can file ITR online by filling up a digital form under a digital signature and then submitting the verification of the return in Return Form ITR-V. Once submitted, an acknowledgement is sent to your registered e-mail ID. Another way to submit the form is by downloading it manually from official Income Tax website. Then send the duly filled and signed form to the Income Tax Department’s CPC office in Bangalore within 120 days of e-filing.

Major Changes made in ITR-4 for AY 2025-26:

Expansion of eligibility to file ITR-1 and ITR-4: The Income Tax Department has expanded the eligibility by relaxing the criteria, allowing more taxpayers to file their tax return using ITR-1 and ITR-4. The new rules allow even taxpayers with long-term capital gains from equity and equity mutual funds to file a tax return using ITR-1 and ITR-4 (as applicable), provided the capital gains do not exceed ₹1.25 lakh.
Aadhaar enrolment ID not acceptable: One of the changes made is the removal of the acceptance of the Aadhaar enrolment ID for the PAN application and at the time of filing the ITR. Post this amendment, PAN applications and ITRs can no longer be filed using Aadhaar enrolment ID instead of the actual Aadhaar number.
Opting out of the new tax regime by small business owners: Taxpayers having business income cannot switch/choose tax regimes every financial year, unlike individuals who don't have business income. As per the income tax rules, taxpayers having business income have once in a lifetime option to switch from the old to the new tax regime. However, this switching requires submission of a form to the tax department.
Mention TDS section in ITR form: This year's income tax return forms require taxpayers to mention the TDS section under which tax was deducted from the income earned.
New capital gains rules incorporated in ITR forms: Budget 2024 announced new capital gains rules, effective July 23, 2024. Hence, if you have made capital gains by selling listed or unlisted shares, equity mutual funds, houses, land, or any other capital asset, then the date of sale is important to calculate the correct capital gains amount and the appropriate tax on it.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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