ITR 4 Form

What is ITR 4 (SUGAM) in the Income Tax Act?

ITR-4, also known as SUGAM, is a simplified income tax return form meant for resident individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) who have opted for the presumptive income scheme under sections 44AD, 44ADA, or 44AE of the Income Tax Act.

This form is ideal for small taxpayers whose income is derived primarily from business or profession and who prefer a simplified tax filing route. ITR-4 enables such taxpayers to compute their income on a presumptive basis, thereby avoiding the need to maintain detailed books of accounts. The form is not applicable for taxpayers who have income from capital gains, foreign income, or who are directors in a company or hold unlisted equity shares. It must be filed online, either using a digital signature or via an electronic verification code.

What is the eligibility criteria for filing ITR-4?

To file ITR-4, a taxpayer must be a resident individual, Hindu Undivided Family (HUF), or a partnership firm (excluding LLPs), whose total income does not exceed Rs.50 lakh during the financial year. The income should be primarily from business or professional activities assessed under the presumptive taxation schemes.

The taxpayer must be eligible under sections 44AD (for small businesses), 44ADA (for professionals), or 44AE (for those involved in plying, hiring, or leasing goods carriages). Additionally, income from salary, one house property, and other sources like interest income (not from lottery or racehorse) can also be reported. The simplicity of ITR-4 makes it suitable for small business owners, freelancers, and service providers who wish to avoid the complexity of regular accounting.

Who is not eligible to file ITR-4?

Individuals or entities that do not meet the criteria for presumptive taxation under sections 44AD, 44ADA, or 44AE are not eligible to file ITR-4. This includes those with total income exceeding Rs.50 lakh or with income from more than one house property, capital gains, or foreign assets.

Taxpayers who are directors in a company, hold unlisted equity shares, or have brought forward losses are also barred from using ITR-4. Additionally, those who need to claim double taxation relief or have income from agriculture exceeding Rs.5,000 are required to file more detailed forms such as ITR-2 or ITR-3. The use of ITR-4 is limited to specific, straightforward income types under the presumptive taxation regime.

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

For Assessment Year 2024–25, significant updates were made to the ITR-4 Form to improve reporting clarity and align with regulatory changes. A new schedule was introduced to report income deferred due to receipts under section 56(2)(viib), particularly relating to advances against capital assets.

Another important update required taxpayers to disclose if they opted for the new tax regime under section 115BAC(1A). This helps the Income Tax Department track choices made by taxpayers concerning the old and new regimes. Additionally, reporting fields were improved for exempt incomes and tax credits, and technical enhancements were made to the e-filing utility to reduce errors and promote efficient digital submission.

Major changes in ITR-4 form in AY 2023-24 and AY 2024-25

In AYs 2023–24 and 2024–25, the ITR-4 Form witnessed updates that increased transparency and improved user experience. Notably, both years introduced revised declaration fields for opting under the concessional tax regime as per section 115BAC, ensuring clear documentation of tax choices.

Additionally, changes were introduced to capture more granular details about financial transactions and digital payments, aligning tax filings with the broader digitisation goals of the government. The Department also added new validation rules and pre-filled data to reduce errors. The ability to report interest income in more defined categories was introduced to help simplify reporting under “income from other sources,” making tax filing more accessible for small taxpayers.

Major changes made in ITR-4 for AY 2022-23

The ITR-4 Form for AY 2022–23 brought several enhancements aimed at simplifying the compliance process for small taxpayers. One of the key changes was the pre-filling of data for taxpayers using the Income Tax portal, which allowed details such as salary income, TDS, and bank interest to be auto-populated.

Additionally, a declaration field was introduced for those opting under the new tax regime. This ensured that taxpayers provided express consent if they chose to be taxed under section 115BAC. The form also improved the interface to allow better classification of income from other sources and updated technical validations for smoother online submission. These changes collectively improved accuracy and ease of filing.

How to file ITR-4 form through Income Tax portal?

To file ITR-4 through the Income Tax portal, log in using your PAN and password. Select the ‘File Income Tax Return’ option, choose the assessment year, and select ITR-4 as the applicable form. The portal offers both online and offline modes for filing.

If using the offline utility, download the pre-filled JSON file, complete the form, and upload it. If filing online, enter the relevant details directly on the portal, verify the form with a digital signature or EVC, and submit. After successful submission, download the acknowledgment for your records. Make sure to keep all relevant documents and declarations ready before starting the process.

Major changes made in ITR-4 for AY 2021-22

In AY 2021–22, the ITR-4 Form incorporated pandemic-related relief measures and reporting guidelines. One key change was the requirement to declare if a taxpayer had deferred tax payments on ESOPs received from eligible start-ups, under the relief provided by the Finance Act, 2020.

Also, the taxpayer had to provide details of cash transactions above Rs.2 lakh for certain business activities, ensuring transparency. The government also enabled auto-population of TDS, salary income, and interest details based on Form 26AS. These additions ensured better matching of tax data and helped reduce tax evasion. The overall structure remained the same, but compliance and transparency were strengthened.

Major changes made in ITR-4 for AY 2019-20

For AY 2019–20, the ITR-4 Form saw major changes to enhance tax compliance and improve transparency. One key addition was mandatory disclosure of details for taxpayers holding directorship in any company or owning unlisted equity shares, effectively disqualifying them from using ITR-4.

The form also introduced changes in income classification and required the taxpayer to provide more information on turnover, particularly for businesses under GST. The validation logic was upgraded to reduce filing errors and ensure accurate return submissions. These changes made ITR-4 more robust, aligning it with the broader objective of reconciling income and ownership patterns with regulatory records.

What is the structure of ITR-4?

The ITR-4 Form is divided into multiple sections, covering personal information, income details, deductions, tax computation, and verification. Part A consists of general details such as name, PAN, Aadhaar number, and bank account information. Part B captures gross total income and tax liability.

The form also includes schedules for income from business under presumptive taxation, deductions under Chapter VI-A, and tax details such as TDS and advance tax. Taxpayers must declare whether they opt for the new tax regime under section 115BAC. The structure is simplified, making it suitable for small taxpayers with straightforward income sources, allowing them to file returns without the burden of detailed accounting.

Verification of ITR-4

The final section of the ITR-4 Form is the verification part, which must be completed by the taxpayer to confirm the truthfulness of the information provided. The verification must include the taxpayer’s name, father’s name, and capacity (e.g. individual, partner).

Once the return is filled, it must be verified electronically via an Electronic Verification Code (EVC) or a Digital Signature Certificate (DSC). If the taxpayer does not use either method, they must manually sign and send the ITR-V to the CPC office in Bengaluru within 30 days. Without verification, the return will not be processed by the Income Tax Department.

Conclusion

ITR-4 (SUGAM) is a simplified tax return form aimed at small taxpayers opting for presumptive taxation under sections 44AD, 44ADA, and 44AE. It offers a convenient method to report business or professional income without maintaining detailed accounts.

While straightforward in structure, it excludes individuals with complex income streams such as capital gains or foreign assets. Regular updates to the form ensure alignment with current tax rules. Filing ITR-4 online through the Income Tax portal with proper verification helps ensure timely processing and compliance. For eligible taxpayers, it remains a practical option for efficient and simplified tax filing.