ITR-4 Filing Online presumptive tax, done right.

What is ITR-4 (Sugam)?

ITR-4, also called Sugam, is the return form for residents who choose the presumptive taxation scheme. Under this scheme, instead of keeping detailed books and proving every expense, you declare profit as a fixed percentage of your turnover or receipts. It can be used by resident individuals, HUFs and partnership firms (other than LLPs) whose total income is up to ₹50 lakh. For FY 2025-26 (AY 2026-27), it is filed under the Income-tax Act, 1961.

The three presumptive sections

• Section 44AD for small businesses: profit is 8% of turnover, or 6% of the part received digitally or through banks. The turnover limit is ₹2 crore, raised to ₹3 crore if cash receipts are not more than 5% of the total.
• Section 44ADA for notified professionals such as doctors, lawyers, engineers, architects, chartered accountants and technical consultants: profit is 50% of gross receipts. The limit is ₹50 lakh, or ₹75 lakh if cash receipts are within 5%.
• Section 44AE for owners of up to 10 goods vehicles: income is a fixed amount per vehicle per month.

Who cannot use ITR-4

• Non-residents and “not ordinarily resident” individuals
• Anyone with total income above ₹50 lakh
• Company directors, holders of unlisted shares, and people with foreign assets
• Anyone with capital gains other than section 112A gains up to ₹1.25 lakh
• Anyone who wants to declare profit below the presumptive rate
• Anyone with losses to carry forward

Common mistakes we see

• Using 44ADA for a profession that is not notified for it
• Applying 6% to cash sales instead of 8%
• Turnover in the return not matching GST returns or AIS
• Leaving 44AD after one year without knowing the five-year consequence
• Missing the single advance tax instalment due by 15 March

How our expert handles your ITR-4

• Step 1: We check your residence, income level and nature of work.
• Step 2: We decide between 44AD, 44ADA and 44AE, or advise ITR-3.
• Step 3: We split receipts into digital and cash using bank statements.
• Step 4: We add salary, rent and interest, and compare both regimes.
• Step 5: We match with AIS and GST, share a summary and file after approval.

A short example

Suppose a doctor running a clinic received ₹40,00,000 in FY 2025-26, all through UPI, cards and bank transfers. Under section 44ADA, presumptive income is 50%, i.e. ₹20,00,000. Under the new regime, tax is ₹20,000 on ₹4–8 lakh, ₹40,000 on ₹8–12 lakh, ₹60,000 on ₹12–16 lakh and ₹80,000 on ₹16–20 lakh, totalling ₹2,00,000. Adding 4% cess of ₹8,000, total tax is ₹2,08,000. There is no standard deduction here because this is not salary. TDS deducted by hospitals or labs is set off against this amount, and the balance is paid as advance tax by 15 March.

For a shopkeeper with turnover of ₹80 lakh, of which ₹60 lakh came digitally and ₹20 lakh in cash, presumptive income under 44AD is ₹3,60,000 plus ₹1,60,000, i.e. ₹5,20,000. That is ₹40,000 more than the ₹4,80,000 it would be if all sales had been digital, which shows why receiving payments through banks lowers the income you must declare. The same five-year rules apply, so we explain them before you opt in.