E-Filing Made Easy Who Should File ITR-4 (Sugam)?
Not sure if ITR-4 is for you?
This guide simplifies eligibility, exclusions, and expert tips so Indian taxpayers can file confidently using the right form.
What is ITR-4 (Sugam)?
ITR-4, also called Sugam, is a simplified return form for presumptive income taxpayers—typically small business owners, professionals, and freelancers who opt for presumptive taxation under:
- Section 44AD – Small businesses
- Section 44ADA – Professionals (like doctors, lawyers, designers)
- Section 44AE – Transporters with goods carriages
Who Can File ITR-4?
You can file ITR-4 if all the following apply:
- Resident Individual / HUF / Firm (other than LLP)
- Total income ≤ ₹50 lakh
- Income from:
- Business under Section 44AD
- Profession under Section 44ADA
- Goods carriage business under Section 44AE
- Salary/Pension, One House Property, and Other Sources (Interest, FD, etc.)
🧾 Example:
A freelance graphic designer earning ₹18 lakh annually and claiming 50% deemed profit under 44ADA can file ITR-4.
Who Cannot File ITR-4?
You must NOT use ITR-4 if:
| Criteria | You’re NOT eligible if you… |
|---|---|
| Residential Status | Are a Non-Resident (NRI) or Resident but Not Ordinarily Resident (RNOR) |
| Turnover | Have total income > ₹50 lakh |
| Income Type | Earn capital gains, foreign income, lottery, horse race winnings |
| Business Type | Own more than one goods carriage or claim actual expenses instead of presumptive |
| Entity Type | Are an LLP, Company, or want to carry forward losses |
⚠️ As per CBDT Notification No. 40/2025 dated 29.04.2025, foreign assets or foreign tax credit (FTC) claimants are also excluded from ITR-4.
How to File ITR-4 Online?
Here’s a simplified step-by-step for ITR-4 e-filing:
- Login to incometax.gov.in
- Go to: e-File > Income Tax Return > File Income Tax Return
- Select AY 2025–26 > Online mode > ITR-4
- Pre-fill, review, and declare income under 44AD/ADA/AE
- Validate → e-Verify via Aadhaar OTP or Net Banking
💡 Expert Tip:
Choose ITR-4 only if you’re sure about presumptive taxation. Once opted, you must stick to it for 5 years (Section 44AD rule).
Legal References & Govt Updates
- CBDT Notification No. 40/2025, dated 29 April 2025 – Link (incometax.gov.in)
- Income-tax Act, 1961 – Sections 44AD, 44ADA, and 44AE
- Budget 2024 Speech – Emphasis on simplifying tax filing for MSMEs
Quick Comparison: ITR-3 vs ITR-4
| Criteria | ITR-3 | ITR-4 |
|---|---|---|
| Type | Regular business/profession | Presumptive income |
| Income Limit | No limit | ₹50 lakh max |
| Books of Accounts | Mandatory | Not required |
| Audit | Yes, if turnover > ₹1 crore | No audit needed under presumptive |
| Form Length | Detailed | Simplified |
FAQs: Filing ITR-4 (Sugam)
Q1: Can salaried individuals file ITR-4?
A: Yes, if they also have presumptive business income and total income is ≤ ₹50 lakh.
Q2: What if I have capital gains?
A: You cannot file ITR-4. Choose ITR-3 or others.
Q3: Is it mandatory to e-verify ITR-4?
A: Yes. E-verification completes the return filing process.
Summary
ITR-4 Sugam is for resident individuals, HUFs, and firms earning up to ₹50 lakh under presumptive income schemes like 44AD, 44ADA, or 44AE. Foreign income, capital gains, or companies are not eligible.
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