The Central Board of Direct Taxes (CBDT) has introduced a major change in the revised ITR-4 (Sugam) by making investment disclosure compulsory for taxpayers choosing the presumptive taxation scheme.
The updated form applies to resident individuals, Hindu Undivided Families (HUFs), and firms other than LLPs whose total income is up to ₹50 lakh. It covers those earning business or professional income under Sections 44AD, 44ADA, and 44AE, along with long-term capital gains from equity shares up to ₹1.25 lakh.
Under the “Financial Particulars of the Business” section, has added a new field that requires taxpayers to report their investments held up to March 31, 2026. This marks the first time such disclosure has been made mandatory for ITR-4 filers under the presumptive taxation scheme.
The new rule will be applicable for income tax return filing in 2026 for Assessment Year 2026–27 (Financial Year 2025–26). In the previous assessment year, taxpayers were not required to provide these investment details in the ITR-4 form.
Step-by-step guide to file new ITR-4
- Collect all required documents such as bank statements, AIS/TIS, PAN, Aadhaar, and Form 26AS before starting the filing process.
2. Visit the e-Filing Portal and log in using your credentials.
3. Go to ‘e-File’ > ‘Income Tax Returns’ > ‘File Income Tax Return’.
4. Choose the correct Assessment Year (for example, AY 2026–27 for FY 2025–26) and select the ‘Online’ filing mode.
5. Check and confirm your general details, including personal profile, employment type, and business information.
6. Enter your income details based on the applicable presumptive taxation section:
Section 44AD: 8% or 6% of turnover
Section 44ADA: 50% of gross receipts
Section 44AE: For transport business taxpayers
7. Fill in eligible deductions under sections like 80C, 80D, and others as applicable.
8. Review taxes already paid, including TDS, TCS, and Advance Tax, using Form 26AS and AIS.
9. Validate the form to check for any errors. The portal will automatically calculate your tax liability.
10. If additional tax needs to be paid, click on ‘Pay Now’. If no tax is due, continue to the next step.
11. Submit the return and complete verification using Aadhaar OTP, Net Banking, or Electronic Verification Code (EVC).
12. After successful filing, download the ITR-V acknowledgement and keep it safely for future reference.
Who can file it and who can’t?
(Sugam) can be filed by resident individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding LLPs) who opt for the presumptive taxation scheme. To be eligible, the taxpayer’s total income should not exceed ₹50 lakh. The form is mainly meant for those earning income from business or profession under Sections 44AD, 44AE, or 44ADA, along with other sources such as interest income, family pension, and similar earnings.
Taxpayers with agricultural income up to ₹5,000 and ownership of not more than two house properties can also use this form. Additionally, individuals with Long Term Capital Gains under Section 112A can file ITR-4, provided the LTCG does not exceed ₹1.25 lakh and there is no capital gains or business loss to be carried forward or adjusted.
Freelancers engaged in eligible professions can also choose this scheme if their gross receipts are within ₹50 lakh. However, if income from salary, house property, or other sources exceeds ₹50 lakh, ITR-4 cannot be filed for Assessment Year 2026–27.
Similarly, a person who is a director in a company, has invested in unlisted equity shares, or has any brought forward or carry-forward loss under the head of business or capital gains is not eligible to file ITR-4 for AY 2026–27.