A major tweak to the ITR-4 (Sugam) has been announced by the Central Board of Direct Taxes (CBDT), with investment disclosures now compulsory for taxpayers using the presumptive scheme.
Resident individuals, Hindu Undivided Families and firms other than LLPs earning up to Rs 50 lakh fall within the scope of the updated form. It is designed for those with business or professional income assessed under Sections 44AD, 44ADA and 44AE, along with equity-related long-term capital gains up to Rs 1.25 lakh.
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The CBDT has inserted a fresh field in the “Financial Particulars of the Business” segment, compelling taxpayers to furnish details of investments as on March 31, 2026.
The change will take effect with income tax filings in 2026 for Assessment Year 2026–27, covering Financial Year 2025–26. The rule marks a departure from the previous year, when no such investment disclosures were mandated in ITR-4.
Filing ITR-4: Steps Explained
- Start by assembling all necessary paperwork, including PAN, Aadhaar, bank statements, AIS/TIS and Form 26AS.
- Log in to the official Income Tax e-Filing portal.
- Access the filing section through ‘e-File' > ‘Income Tax Returns' > ‘File Income Tax Return'.
- Pick the appropriate Assessment Year and choose the online mode.
- Review and confirm personal, employment and business-related details.
- Declare income under the relevant presumptive taxation scheme - Section 44AD for 6%–8% of turnover, Section 44ADA for 50% of receipts and Section 44AE for transport businesses
- Enter deductions available under provisions such as 80C and 80D.
- Check tax payments already made through Form 26AS and AIS.
- Run validation checks; the portal will calculate your final tax liability.
- Settle any pending dues using the ‘Pay Now' option, if required.
- File the return and verify it using Aadhaar OTP, net banking or Electronic Verification Code (EVC).
- Save a copy of the ITR-V acknowledgement for future reference.
The presumptive tax regime enables small businesses, independent professionals and freelancers to estimate their income as a set percentage of total receipts, avoiding the need for itemised expense tracking. In many cases, half of the gross revenue can be treated as taxable income. Beginning AY 2026–27, such filers must also report their investments on the ITR-4 form.
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The form can be used by those reporting agricultural income capped at Rs 5,000 and holding up to two house properties. It is also open to individuals with long-term capital gains under Section 112A, provided the gains remain within Rs 1.25 lakh and there are no losses to carry forward or adjust.
Those working as freelancers in notified professions are eligible for the scheme as long as their total receipts stay under Rs 50 lakh. But if income from salary, house property or other heads is more than Rs 50 lakh, filing ITR-4 for AY 2026–27 is not permitted.
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