India’s Income Tax Department has notified the ITR-4 (Sugam) form for the Assessment Year (AY) 2025-26, offering a simplified tax filing option for small businesses, professionals, and individuals. The announcement, shared via X on May 6, 2025, follows Notification No. 40/2025 dated April 29, 2025, with the updated form effective from April 1, 2025.
Who does ITR-4 apply to?
ITR-4 is a tax filing option tailored for resident individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding LLPs) opting for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE of the Income-Tax Act, 1961.
The form applies to those with income up to ₹50 lakh from business or profession, such as small traders, doctors, lawyers, or transporters. It also covers income from one house property, interest income, or family pension, with a total income cap of ₹50 lakh. A key update this year allows taxpayers with long-term capital gains under ₹1.25 lakh to file ITR-4, broadening its scope.
Who doesn’t qualify?
The form excludes those with income above ₹50 lakh, foreign assets, unlisted equity shares, or directorship in a company. It’s also ineligible for non-residents, those with more than one house property, or individuals under the presumptive taxation scheme but not meeting specific conditions, such as professionals with gross receipts exceeding the threshold for Section 44ADA.
The Ministry of Finance’s notification (G.S.R. 271(E)) amended the Income-Tax Rules, 1962, to ease compliance for small taxpayers. The updated ITR-4 form includes sections for personal details, income sources, and deductions, such as those under Section 80CCH, catering to the new tax regime’s requirements.
