ITR-4 Form (Sugam) - What is ITR-4, Who Should File, Applicability and How to File ITR-4 For AY 2025-26

By CA Mohammed S Chokhawala

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Updated on: May 30th, 2025

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6 min read

ITR-4 should be filed by taxpayers who are running a business and have opted for presumptive taxation scheme under section 44AD, 44ADA and 44AE of the act. Irrespective of whether they have salary income or not, they can file their returns using form ITR-4.

If the businesses do not opt form presumptive taxation, they can file their returns using Form ITR-3.

Then freelancers such as online content writers, bloggers, vloggers, etc. need to file the ITR-4 form. Also, professionals like chartered accountants, doctors, lawyers and engineers, etc. whose income is computed on a presumptive basis u/s 44AD, 44ADA or 44AE need to file this form. 

The Income Tax Department has officially released excel based utility for ITR-1 and ITR-4, marking the start of ITR filing for financial year 2024-25 (AY 2025-26). Now, the taxpayers can proceed filing their returns using the excel utility available on the ‘downloads’ section of the Income Tax portal.

Link to download ITR-1 and ITR-4 excel based utility

What is the ITR-4?

  • Different ITR Forms such as ITR-1, ITR-2, ITR-3, and ITR-4 have been notified by the Income Tax Department for taxpayers to file tax returns based on the nature of their income.
  • ITR-4 is the Income Tax Return form for taxpayers with business income who opt for a presumptive income scheme under Section 44AD, Section 44ADA and Section 44AE of the Income-tax Act,1961. 

What is Presumptive Taxation?

  • Businesses usually have to maintain elaborate books of accounts, and calculate profit according to the relevant provisions of the act.
  • But, a relaxation has been provided for small business whose turnover has not crossed certain prescribed limits. In such cases profits can be calculated as a fixed percentage of turnover and can be shown as income in ITR-4. 
  • This scheme has been introduced to ease the compliance burden on small businesses by exempting them from maintaining detailed accounting records.
  • The presumptive taxation scheme is covered under the following sections:
Presumptive Sections Applicable for whom?Profit Percentage
Section 44ADBusinesses having turnover within Rs. 2 crores (Rs. 3 crores for digital transactions)8% of the turnover (6% for digital transactions)
Section 44ADASpecified professions having turnover up to Rs. 50 lakhs (Rs. 75 lakhs for digital transactions)50% of the turnover 
Section 44AEBusiness of leasing and hiring goods carriages.Calculated on the basis of whether the vehicle is a heavy vehicle or not, and gross vehicle weight.
  • Since the profit is calculated directly as a percentage of turnover, the expenses incurred in course of business cannot be again claimed as a deduction. 

Who is Eligible to File ITR-4?

ITR-4 is to be filed by the individuals/HUF/Partnership firm who fulfill the following conditions:

  • Is a Resident of India as per Income Tax Act
  • Having Business or Professional Income
  • Income from business income calculated under Section 44AD or 44AE
  • Income from profession calculated under Section 44ADA
  • Long-term capital gains income up to Rs. 1.25 lakhs (having no brought-forward or carry-forward capital loss)
  • Should not have income from more than one house property

Who is Not Eligible to File ITR-4?

  • An individual whose total income exceeds rupees 50 lakhs.
  • An individual who is either a director in a company 
  • An individual who has invested in unlisted equity shares cannot use this form.
  • An individual, HUF or partnership firm who is required to maintain the books of accounts under the Income-tax Act, 1961.
  • Resident but not ordinarily residents (RNOR) and Non-residents
  • Individuals  who have earned income through the following means: Lottery, racehorses, legal gambling, etc.
  • Individual who has more than one house property
  • Taxable capital gains (short-term and long-term)
  • Agricultural income exceeding Rs 5,000
  • A resident that has assets (including financial interest in any entity) outside India or is a signing authority in any account located outside India
  • Individuals claiming relief of foreign tax paid or double taxation relief under section 90/90A/91
  • Gains from Virtual Digital Assets (Crypto currency)
  • Individuals for whom the TDS has been deducted under Section 194N

Major Changes in ITR-4 Form from AY 2025-26

Inclusion of Long-Term Capital Gains (LTCG) Reporting

Taxpayers can now report long-term capital gains (LTCG) under section 112A (from listed equity shares and equity-oriented mutual funds) in ITR-1, provided:

  • The total LTCG does not exceed Rs. 1.25 lakh, and
  • There are no brought-forward losses or losses to be carried forward under the capital gains head.

Previously, any capital gains required filing ITR-2; this change allows more taxpayers with a very less LTCG to use the simpler ITR-1 form.

Additional Disclosure for Tax Regime Selection (Section 115BAC)

  • The new tax regime is now the default for individuals, but eligible taxpayers can opt out and choose the old regime each year directly in the ITR.
  • If a taxpayer opted out of the new regime in AY 2024-25, they must declare and confirm their choice or change it for AY 2025-26.
  • First-time opt-outs in AY 2025-26 must provide Form 10-IEA acknowledgment details.
  • Form 10-IEA must be filed before the due date of return filing.

Enhanced Deductions and Disclosures

  • Deductions under Sections 80C to 80U must now be selected from a drop-down menu in the e-filing portal, and the exact clause/sub-section must be specified. This aims to improve accuracy and transparency.
  • Income from retirement accounts maintained abroad (Section 89A) has new fields for better relief tracking.

Aadhaar Enrollment ID Removed

  • The 28-digit Aadhaar Enrolment ID is no longer accepted. 
  • The field now only accepts valid 12-digit Aadhaar Numbers.

Additional Column under Schedule TDS

  • An additional column has been added under the Schedule - TDS Details to specify the section under which TDS is deducted. 

What is the Structure of ITR-4?

ITR-4 is divided into parts as mentioned below: 

PART A: General Information 
PART B: Gross total income from the five heads of income 
PART C: Deduction and total taxable income 
PART D: Tax computation and tax status 
Schedule BP: Details of income from Business-Section 44AD, 44ADA and 44EA 
Information regarding turnover/Gross receipts reported for GST: Furnish the GSTIN 
Financial Particulars of Business: Mention the asset and liabilities that you own 
Schedule IT, TCS and TDS 1: Statement of payment of advance tax and tax on self-assessment, tax collected at source and TDS from salary 
Schedule TDS2: Statement of tax deducted at source on income other than salary. 
Verification column: Declare that all your information furnished are true to your knowledge and add your signature.

How To File ITR-4 Form?

You can submit your ITR-4 Form on ClearTax.

Step 1: Log in or sign up on the ClearTax portal. We’ve added the link to the portal for you in the description below. Login to your account, and let’s get started.

Cleartax login

Step 2: If you are filing with us for the first time, you must link your PAN by entering your PAN, Date of Birth, and the OTP received on your registered mobile number. Linking your PAN will allow us to submit your return to the income tax department. 

Link Pan in Cleartax

Step 3: But if you filed with us last year and your PAN is already linked, you will directly see this screen.

prefill the tax return in Cleartax

Step 4: Here, you will have to complete another OTP verification if you want us to pre-fill the details for you. So there are two options here: if you have your Aadhaar registered mobile number with you, you can opt for Aadhaar registered mobile number option and enter the single OTP received as an SMS. And if you don’t have it, then select the IT Department registered mobile number option and enter two OTPs- one received on your mobile and the other one on e-mail.

OTP verification for tax return filing cleartax

Step 5: Voila! Most of your information has been auto-filled.

Information filled details at cleartax

Step 6: Click on 'Continue to e-File’.

TDS DEDUCTED on salary income

Step 7: Here you will see 4 tabs: Personal Info, Income Sources, Tax Saving, and Tax Summary. Let us first look at the personal info tab. All your personal details like name, address and other details will appear here. You can expand each section and review these details. In case you wish to change some information here, you have the option to edit these details. 

personal information

Step 8: Now let us move to the Income Sources section. 

  1. First up is salary. It may not be applicable in your case if you have business or profession income. 
  2. Then there is ‘Rental or house property Income’ 
  3. ‘Other Income’ section is where you can add all your dividend income, interest income from savings banks, FDs, income from online gaming and also agricultural income. We fetch interest, FD Income and dividend income directly from the Prefill, You just need to review if something is missing and add them.
  4. Then next is the ‘Capital Gains’ section which is where all your income from stocks, mutual funds, US stocks, ESOPs, sale of land or building or jewellery will go. 
  5. ‘Business Income’ here you can fill up details regarding your business income, i.e, income under presumptive taxation.
income sources

Step 9: Now comes the important section which is the ‘Professional, Freelancing and Business Income’ section. So broadly there are 5 sub-sections here. The first section is 44ADA- this is for professionals. The income tax law has specified a few professions and made it clear that only these professionals can opt for 44ADA: 

Professions like 

  1. Legal
  2. Medical
  3. Engineering
  4. Architecture
  5. Accountancy
  6. Technical Consultancy
  7. Interior Decoration
  8. Film Artists like cameraman, producer, editor, actor, director, singer, etc are specified.
professional income from business and professional income
business income under 44AD, 44ADA,44AE,

Step 10: Under ‘Nature of Business’ you will have nearly 40 codes. Select the appropriate code - You can just search for your profession if you do not know your code, that's absolutely fine. And mention the trade name and description.  If you have multiple professions, you can add them all here. 

Note: Your revenue should be less than or equal to Rs 50 lakh and expenses cannot be more than 50% i.e. by default it is assumed that your expenses or cost will not be over 50% of your income.

professional income under section 44ADA

Step 11: Now let’s look at the 44AD section. 44AD is mainly for small businesses. Just like there were some conditions under 44ADA, there are some conditions for 44AD too. The first condition is that your turnover, i.e. nothing but your sales, must be less than 2 crores and the second condition is that your profit must be more than or equal to 8% of your turnover.

44ad

Step 12: Now, it’s time to save some taxes. Go to the tax-savings section and claim all the ‘Deductions’. If you have made donations, tax saving investments like PPF, insurance, ELSS mutual funds, then don't forget to add all those details here. This will help you save some taxes. 

tax saving deduction

Step 13: If you scroll down, you will find the ‘tax-paid’ section. You can upload your Form 26AS to auto-populate the details. All the details of TDS deducted by your clients and also the advance tax you’ve paid, will appear here. If you’ve bought a car or if you’ve gone on a foreign vacation, TCS, i.e. tax may have been collected at source. That also gets filled from 26AS.

tds paid

Step 14: Now scroll down, and you’ll see the other disclosures tab. If any of these conditions apply to you, then enter those details.

other disclosures

Step 15: Click on ‘Go to next’ and you will see a tax summary. Based on all the details you’ve added, we have auto-selected the ITR Form for you. Note that you can switch between old and new tax regimes only once in a lifetime. So be careful when selecting the tax regime.   
Once you are done reviewing all the details in the summary report, click on ‘File Tax’. If you have any tax dues, you can refer to the guide here on ‘how to make the tax payment online’ and complete your tax payment in minutes.

tax summary

Step 16: Once done, don’t forget to e-verify your return and collect exclusive rewards from over 50+ brands!

rewards at cleartax

   
How to File ITR on the Government Portal?

Step 1: Go to the Income Tax e-Filing portal.

Step 2: Log in to the e-filing portal by entering your user ID (PAN), Password, and Captcha code and click 'Login'.

Step 3: Click on the 'e-File' menu and click the 'Income Tax Return' link.

Step 4: Click on ‘Continue’.

Step 5: Read the instructions carefully and fill in all the applicable and mandatory fields of the online ITR form.

Step 6: Choose the appropriate Verification option in the 'Taxes Paid and Verification' tab.

Step 7: Choose any one of the following options to verify the income tax return:

  • I would like to e-verify
  • I would like to e-verify later within 30 days from the date of filing.

Step 8: Click on the 'Preview and Submit' button, Verify all the data entered in the ITR.

Step 9: 'Submit' the ITR.

Step 10: On Choosing the 'I would like to e-Verify' option, e-Verification should be done through any of the available methods by entering the EVC/OTP. 

Major Changes in ITR-4 Form from AY 2024-25

Below changes are incorporated in the ITR-4 form from AY 2024-25 onwards:

  • The default tax regime has been changed to the new tax regime following amendments introduced by the Finance Act 2023 to Section 115BAC. For individuals, HUFs, AOPs, BOIs, and AJPs, the new tax regime now applies by default. Taxpayers who prefer the old tax regime must explicitly choose to opt out. An individual filing ITR 4 must submit Form 10-IEA to opt out of the new tax regime. 
  • ITR-4 form has been updated to include a column for disclosing the amount eligible for deduction under Section 80CCH. Section 80CCH, was introduced by the Finance Act 2023, allowing individuals enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 01-11-2022 to claim a tax deduction for the total amount deposited in the Agniveer Corpus Fund. 
  • The Finance Act 2023 has increased the turnover threshold limit for opting for the presumptive taxation scheme under Section 44AD from Rs. 2 crores to Rs. 3 crores, provided that receipts in cash do not exceed 5% of the total turnover or gross receipts for the previous year. Additionally, Section 44ADA was amended to raise the threshold limit of gross receipts from Rs. 50 lakhs to Rs. 75 lakhs, given that receipts in cash do not exceed 5% of the total gross receipts for the previous year. To reflect these changes, ITR-4 has been updated to include a new column for disclosing "receipts in cash" under Schedule BP. The definition of cash includes cheques or bank drafts that are not account payee.

Also read about:   
Which ITR Should I File   
How to file ITR Online   
How to file ITR-1 (SAHAJ) Online   
What is ITR 2 Form & How to File ITR-2   
What is ITR 3 Form & How to File ITR-3   
What is ITR-5 Form, Structure & How to File ITR 5   
ITR 6   
How to File and Download ITR-7 Form   
ITR 3 vs ITR 4   
ITR 1 vs ITR 4   
How to File ITR-2 for Income from Capital Gains FY 2022-23

Frequently Asked Questions

Can I file ITR 4 offline also?

Yes, you can file offline ITR 4 only if:   
a) You are an individual and 80 years or more in age   
b) you are an individual the income is less than Rs. 5 lakh and who do not have to claim a refund in the income tax return.

If I am opting presumptive scheme so can I claim a deduction of other expenditures and depreciation?

No, if a person is paying tax @ 8% as per section 44AD then he cannot claim depreciation or any other expenditure.

What is a presumptive taxation scheme (PTS)?

The presumptive taxation scheme (PTS) was introduced to provide relief to small taxpayers.  An individual adopting this scheme to file the tax return can declare income at a prescribed rate and, in turn, is exempted from maintenance of books of accounts and also from getting the accounts audited. However, in order to calculate the turnover, one still needs to maintain some books of accounts such as debtors, cash and bank accounts.  

What happens in case you fail to disclose some income?

The Annual Information Statement (AIS), which collates your financial transactions, can be handy in preventing such mistakes, still, you need to be careful while filing your tax return. In case the income tax department detects any source of income missing, you will receive a notice.  

What is Section 44AD and are you allowed a deduction for expenses under Sections 30 to 38?

Section 44AD is applicable to professionals, business and partnership firms. As per Section 44AD, small taxpayers are exempted from maintaining account books only if their profits are less than Rs 2 crore or Rs.3 Crores, if receipts in cash does not exceeds 5% of the turnover or gross receipts. Also, according to presumptive income under Section 44AD,  you can declare gains at a prescribed rate.   
In addition, if the income is credited through a bank or digitally, profits will be considered as 6% as opposed to 8% for cash receipts.   
If you adopt presumptive taxation under Section 44AD, you are not allowed a deduction for expenses under Sections 30 to 38.

What is section 44ADA?

It will be applicable to the professionals, whose total gross receipts do not exceed Rs 50 lakhs and 75 lakhs if the amount received in cash does not exceed 5% of the total turnover or gross receipts in a financial year. The income of the professionals opting for this scheme would be assumed at 50% of the total gross receipts for the year.

What is section 44AE?

44AE is applicable for those who are in the business of plying, leasing or hiring trucks in which there net taxable income from a goods vehicle other than heavy goods vehicle (including any goods carriage) will be calculated as Rs 7,500 per month for each vehicle per month or part   there of during the FY in which the vehicle is owned by the assessee and If the goods is carried by the heavy goods vehicle, then the net taxable income will be the amount equal to 1,000 per ton of gross vehicle weight per month or the part of the month for which the vehicle is owned by the assessee in the previous year. 

What documents do I need to file ITR-4? Is it necessary to link Aadhaar with PAN to file ITR?

You will need to keep the below documents ready (as applicable) to file ITR-4:

  • Form 16
  • Form 26AS & AIS
  • Form 16A
  • Bank Statements
  • Housing Loan Interest Certificates
  • Receipts for Donation Made
  • Rental Agreement
  • Rent Receipts
  • Investment premium payment receipts - LIC, ULIP etc

Linking of Aadhaar and PAN is important. However, you would still be able to file your ITR if your PAN is not linked with Aadhaar, but you will have limited access on the portal. It is therefore advisable to link PAN with Aadhaar.

Who is not eligible for the presumptive taxation scheme of Section 44AD?

The scheme of Section 44AD is designed to give relief to small taxpayers engaged in any business, except the following businesses:
• Business of plying, hiring, or leasing goods carriages referred to in sections 44AE
• A person carrying on any agency business
• A person earning income in the form of commission or brokerage (e.g., insurance agents)
• Any business whose total turnover or gross receipts exceeds ₹ 2 Crore

Apart from the above, a person who is required to maintain books of accounts as referred to in Section 44AA (1) is not eligible for presumptive taxation scheme u/s 44AD. 

The gross receipts for my business in the year are more than ₹ 2 Crore. Can I opt for presumptive taxation scheme of 44AD?

No. You can opt for the presumptive taxation scheme of section 44AD only if the total turnover or gross receipts from your business do not exceed the limit prescribed (i.e., ₹ 2 Crore).

Who can opt for the presumptive taxation scheme of Section 44ADA?

The presumptive taxation scheme of Section 44ADA can be adopted by a resident in India carrying on a specified profession whose gross receipts do not exceed ₹ 50 Lakh in a FY. The following professions are the specified profession:
• Legal
• Medical
• Engineering or Architectural
• Accountancy
• Technical Consultancy
• Interior Decoration
• Any other Profession as notified by CBDT

I opted for the presumptive income scheme of Section 44AD or 44ADA. Can I claim a further deduction of expenses after declaring profit at applicable rate under respective sections of gross receipts?

No, a person who opted for the presumptive taxation scheme is deemed to have claimed all deduction of expenses. Any further claim of deduction is not allowed after declaring profit at a specified rate. However, you can claim deductions under Chapter VI-A.

I opted for the presumptive income scheme of Section 44ADA. Do I have to pay Advance Tax in respect of income from profession covered in Section 44ADA?

Yes. Anyone opting for the presumptive taxation scheme u/s 44ADA is liable to pay 100% of Advance Tax on or before 15th March of the previous year. If you fail to pay the Advance Tax by 15th March of the previous year, you will be liable to pay interest as per Section 234B and Section 234C. Any amount paid by way of Advance Tax on or before 31st March will also be treated as Advance Tax paid during the FY ending on that day.

I opted for the presumptive taxation scheme of Section 44ADA. Do I need to maintain books of accounts as per Section 44AA?

If you are engaged in a specified profession as referred in Sections 44AA (1) and opt for the presumptive taxation scheme of Section 44ADA (declare income @50% of the gross receipts), you are not required to maintain the books of accounts in respect of specified profession (i.e. the provision of Sections 44AA will not apply).

I opted for the presumptive taxation scheme of Section 44AE. Do I have to pay Advance Tax in respect of income from business covered in Section 44AE?

Yes, you will be liable to pay Advance Tax. There is no concession with regard to the payment of advance tax if you opt for the presumptive taxation scheme of section 44AE.

About the Author
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CA Mohammed S Chokhawala

Content Writer
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I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

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