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ITR-4 Sugam Form
File Your Taxes under the Presumptive Income Scheme for Small Businesses & Professionals
Who Should File ITR-4 Sugam?
The Income Tax Department of India has categorized taxpayers into different groups based on their income sources. The ITR-4 Sugam form is specifically designed and applicable for:
- Individuals, HUFs, and Firms (excluding Limited Liability Partnerships)
- Residents with a total income of up to ₹50 lakh
- Those earning income from business or profession under Sections 44AD, 44ADA, or 44AE
It is mainly used by small business owners such as online sellers, wholesalers, and manufacturers who opt for the presumptive taxation scheme, making the tax filing process much simpler.
Eligibility to File ITR-4 Form
To file using this simplified form, an eligible taxpayer's income profile must align with the following criteria:
Total Income Limit
Your total income for the financial year must not exceed the ₹50 lakh threshold.
Business / Profession
Your primary income should stem from a business or profession under the presumptive scheme.
Salary or Pension
You can have income earned from a standard salary, pension, or family pension.
One House Property
Income generated from only one house property is permitted.
Agricultural Income
You may declare agricultural income, provided it is strictly up to ₹5,000.
Interest Income
Interest from banks, post offices, cooperative societies, or income tax refunds is allowed.
Note: If your business turnover exceeds ₹2 crore, you are no longer eligible for the presumptive taxation scheme and must file ITR-3 instead of ITR-4.
Features of Presumptive Taxation Scheme
The presumptive taxation scheme drastically reduces the compliance burden for small taxpayers.
Click on the folders to read the notes
No Detailed Accounts
Taxpayers are relieved from the tedious task of maintaining detailed books of accounts. You do not need to keep comprehensive daily records or get your accounts audited.
Presumed Income Rates
Your income is strictly presumed as 8% of your total cash receipts, or a discounted 6% of your digital/bank receipts, simplifying tax calculations.
No Deductions Allowed
Because income is presumed at a flat percentage, no further deduction of regular business expenses (like rent, salary, depreciation) is allowed under this scheme.
Advance Tax Payments
Taxpayers are required to pay 100% of their advance tax in a single installment by 15th March. There is no requirement to pay quarterly tax installments.
Documents Required to File ITR-4
Keep these documents handy before initiating your tax filing process:
- Form 16
- Form 26AS & AIS
- Form 16A
- Bank Statements
- Housing Loan Interest Certificate
- Donation Receipts
- Rental Agreement & Rent Receipts
- Investment Proof (LIC, ULIP, etc.)
Who is NOT Eligible for ITR-4?
You must opt for other ITR forms if any of the following conditions apply to your profile or income:
Profile Exclusions
- Individuals who have signing authority in any foreign accounts
- Holders of unlisted equity shares
- Taxpayers with foreign income or foreign assets
- Active Directors of any company
Income Exclusions
- Income generated from Capital Gains
- Income from more than one house property
- Winnings from lotteries or racehorses
- Speculative business income outside the presumptive scheme
- Agricultural income exceeding ₹5,000
Additional Disqualifiers:
- Taxpayers carrying forward or bringing forward any losses
- Those making claims for relief under Sections 90 / 90A / 91
- Claiming deductions under Section 57
- Where TDS is claimed in another person’s name
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