ITR-4 Sugam for AY 2026-27: eligibility, presumptive rates under 44AD/44ADA/44AE, old vs new regime, filing workflow, due dates, and penalty exposure.
ITR-4 (also called Sugam) is the income tax return form for resident individuals, HUFs, and firms (other than LLPs) opting for the presumptive taxation schemes under Sections 44AD, 44ADA, or 44AE. Designed for small businesses and professionals, it offers a simplified return where income is declared as a percentage of turnover or receipts. With Finance Act 2026 carrying forward the higher digital thresholds, ITR-4 has become the default form for a large slice of India's self-employed taxpayer base.
Who Can File ITR-4
- Resident individuals, HUFs, and firms (other than LLPs) with total income up to ₹50 lakh.
- Business income computed under Section 44AD where turnover is up to ₹2 crore (₹3 crore where digital receipts meet the threshold).
- Professional income computed under Section 44ADA where gross receipts are up to ₹50 lakh (₹75 lakh under enhanced digital threshold).
- Transporters opting for presumptive taxation under Section 44AE with up to ten goods carriages.
- Salary or pension income, one house property, and other income (excluding lottery and racehorse winnings).
Who Cannot File ITR-4
ITR-4 is not available to non-residents, RNORs, directors of a company, individuals holding unlisted equity shares, individuals with foreign assets or foreign income, and those with capital gains. It is also unavailable when total income exceeds ₹50 lakh or business turnover exceeds the prescribed limits, in which case ITR-3 must be filed.
Presumptive Income Rates
- Section 44AD – 8% of turnover for non-digital receipts, 6% for digital receipts.
- Section 44ADA – 50% of gross professional receipts.
- Section 44AE – fixed amounts per goods carriage per month, differentiated between heavy and other vehicles.
Once income is computed on the presumptive basis, no further deduction of business expenses is allowed. Partners can still claim eligible deductions under Chapter VI-A (subject to the regime chosen).
Old vs New Regime in ITR-4
From AY 2024-25 the new tax regime under Section 115BAC is the default. For AY 2026-27 the basic exemption remains ₹3 lakh, the standard deduction for salaried taxpayers is ₹75,000, and the Section 87A rebate covers tax on income up to ₹7 lakh. To opt for the old regime, an ITR-4 taxpayer with business income must file Form 10-IEA on or before the due date – this is a one-time decision with multi-year consequences.
Filing Workflow
- Reconcile turnover with GST returns and bank receipts; confirm digital share of receipts.
- Choose regime (default new vs old via Form 10-IEA) and compute tax under both for comparison.
- Capture salary, house property, and other income heads alongside presumptive business income.
- Match TDS and advance tax with AIS and Form 26AS.
- Validate ITR-4 on the income tax e-filing portal and submit with Aadhaar OTP, EVC, or DSC.
Due Dates and Penalties
The ITR-4 due date for AY 2026-27 is 31 July 2026 for taxpayers not subject to tax audit. Late filing attracts Section 234F fee of up to ₹5,000, interest under Sections 234A to 234C, and loss of the option to switch out of the new regime in subsequent years for business income taxpayers. The belated return window remains 31 December 2026.
Conclusion
ITR-4 is the right form for genuinely small businesses and professionals who want the simplicity of presumptive taxation. For AY 2026-27, confirm your eligibility against the income and asset ceilings, decide the regime early, and reconcile turnover with GST and bank data before filing. Done well, ITR-4 takes hours, not weeks.
