Step-by-Step Guide to Filing ITR-4 for AY 2025-26 and AY 2024-25

To file ITR-4 for AY 2024-25 (FY 2023-24) and AY 2025-26 (FY 2024-25), small businesses/professionals opting for presumptive taxation (Sections 44AD/ 44ADA/ 44AE) must gather bank statements, gross receipts, and expense details (if maintaining books). Register on the e-filing portal, select ITR-4, and declare income under presumptive schemes (8%/ 6% of turnover for businesses/ professions, or 50% of freight receipts for transport). Report other income (house property, interest, etc.), reconcile TDS with Form 26AS/ AIS, and pay any balance tax. Verify via Aadhaar OTP/ EVC/ DSC and the deadline for filing ITR for FY 2024-25 (AY 2025-26) has been extended to 15 September 2025 from the original date of 31 July 2025.
Home Loan
2 min
25 June 2025

Filing Income Tax return (ITR) is a crucial annual obligation for taxpayers in India. The ITR-4 form, specifically designed for individuals and Hindu Undivided Families (HUFs) having income from a proprietary business or profession, requires careful attention to detail and adherence to specific guidelines. This comprehensive guide will walk you through the process of filling out and filing the ITR-4 form, ensuring compliance with tax regulations and maximizing deductions where applicable.

Latest update on ITR 4 form

  • The Income Tax Department has published the latest version of the schema, Excel utility, and validation rules for ITR-4 for Assessment Year 2025-26. Taxpayers can now download and use it for return filing.
  • The Central Board of Direct Taxes (CBDT) has rolled out this update for individual residents, Hindu Undivided Families (HUFs), and firms (excluding LLPs).
  • This form applies if the total income is up to Rs. 50 lakh.
  • It covers income from business or profession under Sections 44AD, 44ADA, and 44AE.
  • Taxpayers with agricultural income up to Rs. 5,000 are eligible to use this form.
  • This update aims to simplify and streamline the e-filing process for eligible small taxpayers.

Overview of ITR-4

The Income Tax Return ITR-4, also known as Sugam, is designed for individuals, Hindu Undivided Families (HUFs), and firms (excluding LLPs) who choose the presumptive income scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act. This scheme simplifies the tax filing process by allowing eligible taxpayers to declare income at a fixed rate, significantly reducing the need for maintaining detailed books of accounts. The presumptive income scheme is particularly beneficial for small businesses and professionals, as it streamlines compliance and lowers administrative burdens. By opting for ITR-4, taxpayers can focus more on their business activities rather than the complexities of tax documentation. This form is an efficient tool for those looking to ease their tax filing process while ensuring compliance with the Income Tax Act.

What is the ITR 4 Sugam form?

ITR-4, also known as the Sugam Form, is used by those who declare income using the presumptive taxation scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act. It’s meant for small businesses, certain professionals, and those in the transport business.

Taxpayers can use this form if their annual turnover does not exceed Rs. 2 crore. However, as per the latest provisions, this limit is now extended to Rs. 3 crore under Section 44AD and Rs. 75 lakh under Section 44ADA—provided that no more than 5% of total receipts are in cash.

If the turnover goes beyond these revised limits, the taxpayer must file a different ITR form. ITR-4 is designed to help simplify tax filing for small businesses and professionals by allowing them to pay tax at a fixed rate without maintaining detailed books of accounts or undergoing audits.

Who can file the ITR 4 Sugam form?

  • Individuals, HUFs, or partnership firms (except LLPs) who are residents of India.
  • Total annual income must not exceed Rs. 50 lakh.
  • Taxpayers earning through a business or profession under Section 44AD, 44ADA, or 44AE.
  • Those with income from savings like interest, family pension, etc.
  • Agricultural income, if any, should not exceed Rs. 5,000.
  • The taxpayer should own only one house property.
  • Can include long-term capital gains under Section 112A only if the gain does not exceed Rs. 1.25 lakh and no losses are to be carried forward.
  • Freelancers offering services under eligible professions may also opt for ITR-4 if their total receipts are within Rs. 50 lakh.

Who is not eligible to file ITR-4?

  • Individuals with total income exceeding Rs. 50 lakh.
  • Those holding directorship in any company.
  • Individuals who hold unlisted equity shares.
  • Taxpayers (individuals, HUFs, or firms) required to maintain books of accounts under tax laws.
  • Resident but not ordinarily resident (RNOR) and non-resident individuals.
  • Individuals with income from lotteries, horse races, or gambling.
  • Those owning more than one residential property.
  • Taxpayers with capital gains beyond the limits mentioned.
  • Agricultural income exceeding Rs. 5,000.
  • Anyone having assets or signing authority in a foreign country.
  • Those claiming tax relief under sections 90, 90A, or 91.
  • Income from cryptocurrencies or other virtual digital assets.
  • Individuals subject to TDS under Section 194N.

Types of incomes covered

ITR-4 covers various types of incomes, including:

  • Income from business or profession under the presumptive income scheme.
  • Salary or pension.
  • Income from one house property (excluding cases where loss is brought forward from previous years).
  • Income from other sources (excluding lottery winnings and racehorses).

Step-by-step guide on how to file ITR-4

Step 1: Collect the necessary documents

Gather all relevant documents, including your PAN card, Aadhaar card, bank statements, TDS certificates, and proof of investments. Ensure you have the details of any home loan, especially if you are claiming deductions for the same.

Step 2: Download the ITR-4 form

Visit the official Income Tax Department website and download the ITR-4 form. You can also use the online e-filing portal for a more streamlined process.

Step 3: Fill in personal information

Enter your personal information, such as name, address, PAN, Aadhaar number, and contact details, in the ITR-4 form.

Step 4: Provide income details

Input your income details from various sources:

  • For business income under the presumptive scheme, declare the gross turnover and calculate the presumptive income.
  • For salary income, provide the salary details as per Form 16.
  • For house property income, mention the rental income and any deductions.
  • For other sources of income, specify the interest earned and other relevant details.

Step 5: Claim deductions

Claim deductions under various sections such as:

  • Section 80C for investments in PPF, NSC, life insurance, etc.
  • Section 80D for medical insurance premiums.
  • Section 24(b) for interest on home loans. Ensure you understand how to claim HRA while filing ITR, as it can significantly reduce your taxable income

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Step 6: Compute tax liability

Calculate your total income and apply the appropriate tax rates to compute your tax liability. Ensure you account for any advance tax paid or TDS deducted.

Step 7: Verify and submit

Review all the details entered in the ITR-4 form to ensure accuracy. Submit the form online and verify it using Aadhaar OTP, EVC (Electronic Verification Code), or by sending a signed copy to the Centralised Processing Centre (CPC) of the Income Tax Department.

Filing and submission

The process of filing and submission of ITR-4 can be done electronically through the Income Tax Department's e-filing portal. Once the form is submitted, it needs to be verified. You can verify your return electronically through Aadhaar OTP, net banking, or by sending a physical copy of the ITR-V (Verification) to the CPC within 120 days of filing the return. Proper verification ensures your return is processed promptly.

What is presumptive taxation?

Presumptive taxation is a simplified method for small businesses and professionals to calculate their taxable income. Normally, businesses must maintain detailed accounts and compute their profits as per standard rules. But under the presumptive scheme, income is estimated as a fixed percentage of the total turnover, allowing taxpayers to skip maintaining books or undergoing audits.

This scheme is especially beneficial for small businesses and independent professionals, helping them reduce compliance burdens.

Here’s how different presumptive sections work:

Section

Who can use it?

Profit calculation method

Section 44AD

Small businesses with turnover up to Rs. 2 crore (or Rs. 3 crore for mostly digital payments)

8% of turnover (6% for digital receipts)

Section 44ADA

Professionals with receipts up to Rs. 50 lakh (or Rs. 75 lakh if cash receipts are under 5%)

50% of gross receipts

Section 44AE

Those engaged in goods carriage business

Based on number and type of vehicles owned


Note: Since profits are presumed, no further deductions for expenses like rent, electricity, etc. can be claimed under this scheme.

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What is the structure of ITR-4 form?

  • Part A – Basic personal and contact information
  • Part B – Gross total income details from all heads
  • Part C – Deductions claimed and net taxable income
  • Part D – Computation of tax and refund/payment status
  • Schedule BP – Business income under Sections 44AD, 44ADA, or 44AE
  • GST Information – Declare turnover and GSTIN if applicable
  • Financial Details – Report assets and liabilities of the business
  • Schedule IT, TDS 1, and TCS – Advance tax, TDS on salary, and tax collected at source
  • Schedule TDS 2 – Tax deducted on income other than salary
  • Verification Section – Self-declaration and signature

Other topics you might find interesting

How to File ITR 1

How to File ITR 3

How to File ITR 2


Major changes in ITR-4 form from AY 2024-25

1. Reporting of capital gains under section 112A

Taxpayers can now report long-term capital gains (LTCG) from listed shares or equity mutual funds under Section 112A in ITR-1—provided:

  • The total LTCG does not exceed Rs. 1.25 lakh, and
  • There are no carry-forward losses under capital gains.
    This shift allows eligible taxpayers to file the simpler ITR-1 form instead of ITR-2.

2. Tax regime selection disclosure (section 115BAC)

From AY 2025-26, the new tax regime becomes the default option. However, taxpayers can choose the old regime by indicating their preference in the ITR form.

 

  • If the old regime was selected in the previous year (AY 2024-25), that choice must be confirmed or changed.
  • New opt-outs for AY 2025-26 must include Form 10-IEA acknowledgement number, submitted before the due date.

 

3. New disclosure requirements

 

  • Deductions under Sections 80C to 80U must now be selected from a dropdown and detailed with specific clauses on the e-filing portal.
  • Relief under Section 89A for retirement income from foreign accounts includes new reporting fields.

 

4. Aadhaar details update

The 28-digit Aadhaar Enrolment ID will no longer be accepted. Only the 12-digit Aadhaar number will be valid for filing.

5. TDS schedule updated

A new column has been added in the TDS section to specify the applicable section under which tax was deducted.

These updates aim to improve clarity, reduce errors, and provide a more structured filing experience for taxpayers.

As tax regulations evolve to become more taxpayer-friendly, it is also an opportune time to consider major financial decisions like homeownership, which offers significant long-term tax benefits under sections like 80C and 24(b). With Bajaj Finserv, you can take advantage of attractive interest rates starting from 7.49%* p.a and convenient processing with approval in just 48 hours*. Check your eligibility for a home loan from Bajaj Finserv right away. You may already be eligible, find out by entering your mobile number and OTP.

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Other topics you might find interesting

Income Tax Notice Section 142 1​

Section 80CCD 2 of Income Tax Act

Section 194H of Income Tax Act

Section 80CCD 1 of Income Tax Act

Section 148 of Income Tax Act

Section 80GGC of Income Tax Act

Section 80DD of Income Tax Act

Section 80E of Income Tax Act

Home Loan Interest Deduction

Section 80CCD 1B of Income Tax Act

Section 80DDB of Income Tax Act

Section 80G of Income Tax Act

56 2 X of Income Tax Act

Section 194IA of Income Tax Act

Section 80EEA of Income Tax Act

Income Tax Slab


Conclusion

Filing the ITR-4 form is an efficient and straightforward process for small businesses, freelancers, and professionals who meet the eligibility under the presumptive taxation scheme. With updated thresholds, new disclosures, and simplified structures, the government has aimed to reduce paperwork and compliance hassle. Understanding who can file, what is required, and how the scheme benefits the taxpayer is crucial for smooth return filing. Always ensure accuracy in reporting and be mindful of deadlines. For added ease, use the updated ITR utilities and e-filing portal features to stay compliant and avoid unnecessary notices or delays.

Having successfully navigated your tax obligations, you are now better positioned to make informed decisions about major investments like purchasing a home, which can provide substantial tax benefits in future ITR filings. Bajaj Finserv offers seamless home financing solutions with competitive rates, flexible tenure options up to 32 years, and quick approval processes. Check your eligibility for a home loan from Bajaj Finserv today. You may already be eligible, find out by entering your mobile number and OTP.

Popular calculators for your financial calculations

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Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Frequently asked questions

Can I file ITR-4 offline?

Yes, ITR-4 can be filed offline only if you are an individual aged 80 years or more, or your total income is below Rs. 5 lakh and you do not want to claim a refund. In all other cases, it must be filed online through the Income Tax Department’s e-filing portal.

Can I claim deductions for expenses and depreciation under the presumptive scheme?

No, if you opt for the presumptive scheme under Section 44AD and declare income at 8% (or 6% for digital receipts), you cannot claim further deductions like business expenses or depreciation separately. The declared income is considered final.

What is the presumptive taxation scheme (PTS)?

The presumptive taxation scheme is meant for small taxpayers. Under this, income is declared at a fixed rate of turnover and there’s no need to maintain detailed books or get an audit done. However, basic records like bank and cash details should still be maintained to calculate total turnover properly.

What happens if I forget to disclose some income?

If any income is missed, you may receive a notice from the tax department. The Annual Information Statement (AIS) helps verify your financial details. Always check the AIS and Form 26AS before filing to avoid such issues and ensure all your income sources are reported accurately.

What is Section 44AD, and can I claim expenses under it?

Section 44AD applies to small businesses and firms with turnover within Rs. 2 crore (Rs. 3 crore for digital payments under 5% cash). Income is declared at 8% or 6%. If you choose this section, you cannot claim further deductions under Sections 30 to 38 for expenses.

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What is Section 44ADA?

Section 44ADA applies to professionals such as doctors, lawyers, and consultants whose gross receipts do not exceed Rs. 50 lakh (or Rs. 75 lakh with less than 5% cash receipts). They can declare 50% of receipts as income under the presumptive scheme without needing to maintain books.

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What is Section 44AE?

Section 44AE is for those in the goods carriage business. Income is fixed at Rs. 7,500 per month per vehicle (non-heavy) or Rs. 1,000 per tonne of vehicle weight (heavy vehicles), for each month the vehicle is owned. No need to calculate actual expenses separately under this scheme.

What documents are needed to file ITR-4? Is Aadhaar linking with PAN mandatory?

You may need Form 16, 26AS, AIS, interest certificates, rent receipts, investment proofs, and bank statements. Linking PAN with Aadhaar is important. You can still file ITR without linking, but certain features may be restricted. It’s better to link them for full access and smoother processing.

Who is not eligible for Section 44AD’s presumptive scheme?

You cannot use Section 44AD if you:

  • Carry agency or commission-based business
  • Own goods vehicles (covered under 44AE)
  • Have turnover above Rs. 2 crore
  • Are required to maintain books of accounts under Section 44AA(1)
My business turnover is over Rs. 2 crore. Can I still use Section 44AD?

No, you cannot. Section 44AD is only for businesses with total turnover or gross receipts up to Rs. 2 crore (Rs. 3 crore for mostly digital payments). If your receipts exceed this limit, you must follow regular income computation and use a different ITR form.

Who can use the presumptive scheme under Section 44ADA?

Any Indian resident engaged in a specified profession like law, medicine, engineering, accountancy, consultancy, interior design, etc., can opt for Section 44ADA if annual receipts are up to Rs. 50 lakh (Rs. 75 lakh with low cash payments). Income is assumed to be 50% of receipts.

Can I claim further expenses after declaring presumptive income under 44AD or 44ADA?

No, once you declare your income under the presumptive scheme at the applicable rate, further business expenses cannot be claimed. However, you can still claim eligible deductions under Chapter VI-A such as Sections 80C, 80D, etc., as applicable.

Do I need to pay advance tax under Section 44ADA?

Yes, if you choose presumptive taxation under Section 44ADA, you must pay 100% of your estimated tax as advance tax by 15th March of the financial year. If not paid on time, interest will be charged under Sections 234B and 234C.

Do I need to maintain books of accounts under Section 44ADA?

No, if you declare income under Section 44ADA at 50% of gross receipts, you are not required to maintain detailed books of accounts. This exemption applies only if you are engaged in a profession listed under Section 44AA(1) and your receipts stay within the limit.

Do I need to pay advance tax under Section 44AE?

Yes, even if you file your return using Section 44AE’s presumptive income method, you are still required to pay advance tax as per the rules. There is no exemption from advance tax payment under this section.

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