What is ITR-4 (SUGAM)?
ITR-4, also known as SUGAM, is an Income Tax Return form for individuals, HUFs, and firms (other than LLPs) who have opted for the Presumptive Taxation Scheme under Sections 44AD, 44ADA, or 44AE of the Income Tax Act. It simplifies tax compliance for small businesses and professionals by allowing them to declare income as a fixed percentage of turnover without maintaining detailed books of accounts.
Presumptive Taxation Schemes
| Section | Applicable To | Turnover Limit | Presumptive Income |
|---|
| Section 44AD | Small businesses (non-professionals) | Up to ₹2 Crore | 8% of turnover (6% for digital receipts) |
| Section 44ADA | Specified professionals (doctors, CAs, lawyers, engineers, architects) | Up to ₹50 Lakh | 50% of gross receipts |
| Section 44AE | Transporters (goods carriage business) | Up to 10 vehicles | ₹7,500 per vehicle per month |
Who Should File ITR-4?
- Small business owners with business turnover up to ₹2 Crore (Section 44AD)
- Doctors, lawyers, CAs, engineers, architects with professional receipts up to ₹50 Lakh (Section 44ADA)
- Truck / goods vehicle owners with up to 10 vehicles (Section 44AE)
- Individuals and HUFs also having salary income, one house property, and other income
Who CANNOT File ITR-4?
- Companies and LLPs
- Individuals with business income exceeding ₹2 Crore
- Individuals with capital gains from any source
- Individuals with income from more than one house property
- NRIs and individuals with foreign assets/income
- Company directors and shareholders of unlisted companies
Key Benefits of Presumptive Taxation (ITR-4)
- No detailed books of accounts required to be maintained
- No tax audit required (unless declaring income below the presumptive rate)
- Simple return filing — no P&L or balance sheet needed
- Advance tax can be paid in a single instalment by 15th March
