ITR-4 (Sugam) Guide: Presumptive Business & Profession
ITR-4 (Sugam) is the return for small businesses and professionals who declare income on a presumptive basis — a fixed percentage of turnover or receipts, with no books of account required. This guide covers the three presumptive schemes (44AD, 44ADA, 44AE), the limits, and when ITR-4 is right versus ITR-3, for AY 2026-27 (FY 2025-26).
What "presumptive" means
Under presumptive taxation you don't compute actual profit from books — you declare a deemed profit as a set percentage of your turnover or receipts, and pay tax on that. It trades a little precision for a lot less paperwork, which is why it suits small businesses and independent professionals. For the full mechanics, read presumptive taxation under 44AD & 44ADA.
The three schemes
| Section | For | Deemed profit | Limit |
|---|---|---|---|
| 44AD | Small businesses (eligible) | 8% of turnover (6% for digital receipts) | Turnover up to ₹2 crore (₹3 crore where cash receipts ≤ 5%) |
| 44ADA | Eligible professionals | 50% of gross receipts | Receipts up to ₹50 lakh (₹75 lakh where cash receipts ≤ 5%) |
| 44AE | Goods-carriage transporters | Fixed amount per vehicle, per month | Up to 10 goods vehicles |
The percentages and turnover limits above are illustrative summaries; confirm the current thresholds for your year on the official portal.
Who should use ITR-4
ITR-4 is for resident individuals, HUFs and firms (other than LLPs) with total income up to ₹50 lakh who declare business or professional income presumptively under 44AD, 44ADA or 44AE. You can also include salary, one house property and other-sources income, as long as everything stays within the ₹50 lakh cap. If you only have salary and small other income, you likely want ITR-1 instead — compare the two in ITR-1 vs ITR-4.
ITR-4 vs ITR-3
Reach for ITR-3 instead when you have business or professional income but don't opt for presumptive taxation, when your total income exceeds ₹50 lakh, or when you have capital gains, more than one house property, foreign assets, or income as a partner in a firm. Got capital gains alongside business income? See capital gains: which ITR — that combination generally pushes you out of ITR-4.
Advance tax still applies
Presumptive taxpayers under 44AD/44ADA generally pay their advance tax in a single instalment by 15 March. Miss it and interest under sections 234B/234C can apply — read advance tax & 234B/234C interest, and estimate your liability with the advance tax calculator or the income tax calculator.
How MyTaxLocker helps with ITR-4
MyTaxLocker supports presumptive cases: you enter your turnover or receipts for 44AD or 44ADA, it applies the deemed-profit rate, computes your tax, and prepares a ready-to-upload ITR-4 JSON for you to upload yourself. For 44AE, the per-vehicle, per-month detail is captured inside the app. You upload the JSON to the official Income Tax e-Filing portal yourself — the app does not file or submit anything on your behalf.
Frequently asked questions
Who should use ITR-4 (Sugam)?
ITR-4 is for resident individuals, HUFs and firms (other than LLPs) with total income up to ₹50 lakh who declare business or professional income on a presumptive basis under Section 44AD, 44ADA or 44AE. It can also include salary, one house property and other-sources income within the same ₹50 lakh cap.
What is the difference between 44AD, 44ADA and 44AE?
Section 44AD covers small businesses (deemed profit of 8%, or 6% for digital receipts, of turnover). Section 44ADA covers eligible professionals (deemed profit of 50% of gross receipts). Section 44AE covers goods-carriage transporters and is computed per vehicle. Each has its own eligibility and turnover or receipt limits.
When should I use ITR-3 instead of ITR-4?
Use ITR-3 if you have business or professional income but do not opt for (or are not eligible for) presumptive taxation, if your total income exceeds ₹50 lakh, if you have capital gains, more than one house property, foreign assets, or income as a partner in a firm. ITR-4 is only for presumptive cases within the ₹50 lakh cap.
Prepare your ITR-4 JSON
Enter your presumptive turnover or receipts and MyTaxLocker computes your tax and prepares a ready-to-upload ITR-4 JSON for you to upload to the official portal.
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