ITR-4 Filing for AY 2026-27: Eligibility, Presumptive Taxation and Online Filing Steps

ITR-4, known as Sugam, is a simplified income tax return for certain resident individuals, Hindu Undivided Families (HUFs) and partnership firms other than LLPs. It is designed for taxpayers whose eligible business or professional income is computed under the presumptive taxation provisions of sections 44AD, 44ADA or 44AE of the Income-tax Act, 1961.

For AY 2026-27, the return reports income earned from 1 April 2025 to 31 March 2026, which is FY 2025-26. This return continues to be governed by the 1961 Act. Do not confuse AY 2026-27 with Tax Year 2026-27, which relates to income earned from 1 April 2026 onwards under the Income-tax Act, 2025.

ITR-4 may also include certain other income, such as salary or pension, income from up to two house properties, agricultural income up to ₹5,000, and eligible interest or family-pension income. ITR-4 is optional: meeting its conditions does not make it mandatory to use this form if another applicable form is more suitable.

Who can file ITR-4 for AY 2026-27?

You may be eligible if all the applicable conditions are met:

ITR-4 eligibility is different from eligibility for a presumptive taxation scheme. For instance, your business may qualify for section 44AD, but you may still be unable to use ITR-4 because of another excluded income source, total income above ₹50 lakh or non-resident status.

Review the AY 2026-27 form and portal questions before filing. The TaxClear guide to choosing an ITR form for AY 2026-27 compares ITR-4 with other forms for individuals and HUFs.

Who cannot file ITR-4?

The Income Tax Department’s AY 2026-27 guidance excludes taxpayers who:

• Are non-residents or resident but not ordinarily resident (RNOR).
• Have total income above ₹50 lakh.
• Have short-term capital gains.
• Have section 112A long-term capital gains above ₹1.25 lakh.
• Have agricultural income above ₹5,000.
• Are directors in a company or held unlisted equity shares during the year.
• Have income from more than two house properties.
• Have lottery winnings, income from owning and maintaining racehorses, or income taxable under sections 115BBDA or 115BBE.
• Have deferred tax on eligible start-up employee stock options.
• Have any asset (including a financial interest in an entity) located outside India, signing authority in an account outside India, or income from a source outside India.
• Have a brought-forward or carry-forward loss under any head, or income from a foreign retirement-benefit account covered by section 89A.
• Do not meet the form’s other eligibility conditions.

If you have an income type that ITR-4 excludes, you may still need to file a return using another applicable form. ITR-3 is generally relevant when an individual or HUF has business or professional income but cannot use ITR-4. A company or LLP must use a form applicable to that entity, not ITR-4.

The form now allows income from up to two house properties. This change does not override the other eligibility requirements. Likewise, the limited allowance for section 112A gains does not mean that all capital gains can be reported in ITR-4.

Understand the three presumptive taxation sections

Presumptive taxation lets eligible taxpayers calculate business or professional income using a prescribed percentage or amount, instead of working out taxable profit from detailed expense accounts. The taxpayer must still report receipts correctly and meet the conditions of the relevant section.

Section 44AD: Eligible small businesses

Section 44AD is generally available to a resident individual, HUF or partnership firm other than an LLP carrying on an eligible business. It does not apply to specified professions, agency businesses, or a person earning commission or brokerage. The business of plying, hiring or leasing goods carriages is covered separately by section 44AE.

The turnover or gross-receipts limit is generally ₹2 crore for FY 2025-26. It can be ₹3 crore if cash receipts do not exceed 5% of total turnover or gross receipts. The threshold test is based on receipts, not simply on whether the taxpayer has a bank account.

The usual presumptive rates are:

• 8% of eligible turnover or gross receipts.
• 6% for qualifying receipts received through eligible banking or electronic modes within the period specified by law.

If actual business profit is higher, report the higher amount. A presumptive percentage is not a reason to omit receipts or report a figure that does not reflect the business records.

Section 44AD also has a continuity rule. If you opt out after using the scheme in the relevant manner, restrictions may apply to using it again for the following five assessment years. If you report profit below the prescribed amount, books and tax-audit requirements may apply depending on your total income and circumstances. Check the specific conditions before reporting a lower figure.

Section 44ADA: Specified professionals

Section 44ADA applies to a resident individual or partnership firm other than an LLP engaged in a profession specified under section 44AA(1), such as legal, medical, engineering, architectural, accountancy, technical consultancy or interior-decoration work.

The gross-receipts limit is generally ₹50 lakh. It rises to ₹75 lakh if cash receipts do not exceed 5% of total gross receipts. Presumptive professional income is generally 50% of gross receipts, or a higher amount if actual income is higher.

Not all freelancers, consultants, creators or self-employed individuals automatically have a profession covered under section 44ADA. The activity and the taxpayer’s legal form matter. If you receive professional fees as well as unrelated business receipts, check whether each activity qualifies and whether ITR-4 is available.

If you report professional income below the prescribed 50%, books and audit requirements may apply when the law’s income conditions are met. TaxClear’s section 44ADA guide for AY 2026-27 explains the professional eligibility and receipt thresholds.

Section 44AE: Goods carriage business

Section 44AE applies to a person engaged in plying, hiring or leasing goods carriages who owns no more than 10 goods carriages at any time during the previous year. Presumptive income is calculated using the prescribed amount for each vehicle and each month, depending on the vehicle category and, where relevant, its carrying capacity.

Do not use the section 44AD or 44ADA percentages for a transport business covered by section 44AE. Keep vehicle ownership, registration, carrying-capacity and period-of-ownership details so you can calculate the prescribed amount correctly. If you report less income than the amount under section 44AE, check the books and audit rules before filing.

ITR-4 deadline and late filing

The Income Tax Department’s AY 2026-27 ITR-4 FAQ lists 31 August 2026 as the due date. That date has passed. A taxpayer who missed the applicable deadline can generally file a belated return by 31 December 2026 or before assessment is completed, whichever is earlier.

A late return may attract a fee under section 234F: ₹1,000 if total income does not exceed ₹5 lakh, and ₹5,000 in other cases. Interest may also apply if tax was unpaid. The fee and interest depend on the taxpayer’s circumstances and tax calculation.

CBDT Circular No. 07/2026 extended certain AY 2026-27 return deadlines from 31 October to 21 November 2026 for persons covered by the specified category in section 139(1). This does not automatically extend the deadline for every ITR-4 filer. Check which category and due date apply to you; the portal’s general ITR-4 FAQ lists 31 August.

Documents and information to gather

Some information may be prefilled in the return, but check those figures against your records. Gather:

• PAN, Aadhaar and active bank-account details.
• Sales, turnover or professional-receipt records, separated by payment mode where the presumptive rate depends on it.
• Bank statements, cash book or other records supporting business receipts.
• Form 16, if you also received salary or pension.
• Form 26AS, Annual Information Statement (AIS) and Taxpayer Information Summary (TIS).
• TDS certificates, advance-tax details and self-assessment-tax challans.
• Rent, municipal-tax and home-loan details if reporting house-property income.
• Details of section 112A transactions and any eligible deductions.
• Vehicle information if reporting income under section 44AE.

Reconcile receipts with bank records, invoices, GST returns where applicable, and information reported by customers or platforms. GST turnover and income-tax receipts may differ because their definitions and adjustments can differ. Check the difference rather than copying a figure without review.

ITR-4 generally does not require you to attach supporting documents. Keep your records in case the department requests them or you need to respond to a notice.

How to file ITR-4 online

The general online filing process is:

1. Log in to the e-Filing portal using your user ID and password.
2. Go to e-File → Income Tax Returns → File Income Tax Return.
3. Select Assessment Year 2026-27 and choose online filing.
4. Select your taxpayer status and ITR-4. If the portal indicates that you are not eligible, review the form, status and income information before proceeding.
5. Review prefilled personal, salary, interest, tax-payment and TDS information. Correct errors and add missing income.
6. Complete the business or profession schedules. Report the correct section, gross receipts and presumptive income. For section 44AD, account for the eligible receipt categories when applying the 6% and 8% rates.
7. Complete other applicable schedules, including salary, house property, other sources, deductions and tax credits.
8. Choose the tax regime and check whether an option or form is needed. An individual with business or professional income who wants to opt out of the default new regime generally needs to file Form 10-IEA by the section 139(1) due date. Check the form’s validity and your previous-year regime history. Business taxpayers do not have the same year-by-year switching choice as taxpayers without business income.
9. Calculate tax, pay any balance due and enter the challan details. Check the calculation and bank-account selection.
10. Preview and submit the return, then e-verify it using an available method. Filing is not complete until the return is verified within the period shown by the portal.

Portal screens and labels can change. Follow the current instructions for AY 2026-27. For a broader overview, see TaxClear’s online ITR filing guide for AY 2026-27.

Common ITR-4 mistakes

• Filing ITR-4 just because turnover is below the presumptive limit, without checking the form’s exclusions.
• Treating all freelance or consulting work as a profession under section 44ADA.
• Applying the wrong presumptive percentage or using the wrong section.
• Reporting banked receipts but omitting cash or platform receipts.
• Assuming that deductions reduce the gross-receipt or turnover threshold.
• Leaving out salary, interest, rent or other permitted income because the main income is presumptive.
• Selecting a tax regime without checking Form 10-IEA requirements and the deadline.
• Submitting the return without e-verifying it.
• Assuming a late return can preserve every loss or tax benefit available when filing on time.

Examples

Small retail business: A resident individual has shop turnover within the section 44AD limit and no excluded income. If all other conditions are met, the taxpayer may calculate business income presumptively and use ITR-4.

Professional with mixed receipts: A resident architect receives professional fees and bank interest. ITR-4 may be available if the gross-receipt and cash-receipt conditions under section 44ADA are met, along with the total-income and other form conditions. The taxpayer should check that the activity falls within a specified profession.

Business owner with short-term gains: A taxpayer meets the section 44AD conditions but also has short-term capital gains from a share sale. Because short-term capital gains are excluded from ITR-4 for AY 2026-27, the taxpayer should check the appropriate alternative form.

FAQs

If I am eligible, do I have to use ITR-4?

No. ITR-4 is an optional simplified return. You may use another applicable form if it better suits your income and reporting requirements.

Can a freelancer file ITR-4?

Possibly. Check the nature of the work, section 44ADA’s specified-profession rules, residency, receipts and all other ITR-4 conditions. Being a freelancer by itself does not establish eligibility.

Can I use ITR-4 if I also have salary income?

Yes, if you meet the other requirements. ITR-4 can include salary or pension along with eligible presumptive income.

Can I file ITR-4 after 31 August 2026?

A belated return can generally be filed by 31 December 2026 or before assessment is completed, whichever is earlier. Late fees and interest may apply.

Do I need to upload bills and receipts with ITR-4?

Usually, supporting documents are not uploaded with the return. Keep them with your records and report income and tax credits accurately.