ITR-4 Filing (Presumptive Scheme)
For small businesses and professionals declaring income under the presumptive taxation provisions.
ITR-4, called Sugam, is for taxpayers who declare income under the presumptive taxation scheme. Instead of maintaining full books and computing actual profit, you declare a prescribed percentage of turnover as income and pay tax on that.
The trade-off is deliberate: you give up deducting your actual expenses in exchange for not having to maintain detailed books or undergo a tax audit. For many small businesses and professionals with modest costs, that is a good bargain.
What this costs
Assisted Tax Filing
₹3,704 plus GST
- Document collection & review
- ITR form identification
- Income computation
- Standard deduction claimed, along with 80C, 80D and 80TTA
- Your liability computed, with a clear statement of tax payable or refund due
- ITR preparation & filing
- ITR acknowledgement copy
The three presumptive schemes
- Section 44AD — small businesses, declaring eight per cent of turnover, or six per cent where receipts come through banking channels
- Section 44ADA — specified professionals, declaring fifty per cent of gross receipts
- Section 44AE — those in the business of plying, hiring or leasing goods carriages, on a per-vehicle basis
- Each has its own turnover ceiling, with a higher ceiling where cash receipts are within the prescribed limit
Who cannot use ITR-4
- Total income exceeding the ceiling prescribed for the form
- Ownership of more than one house property
- Capital gains beyond what the form permits
- Foreign income, foreign assets or a foreign bank account
- Being a director in a company, or holding unlisted equity shares
- Non-resident and not ordinarily resident individuals
- Brought-forward losses to be set off or carried forward
The five-year lock-in under 44AD
This is the trap in the scheme. If you opt into Section 44AD and then opt out in a later year by declaring lower profits, you are barred from returning to the presumptive scheme for the five assessment years that follow.
For those five years you must maintain books and, where the thresholds apply, undergo a tax audit. It is worth deciding deliberately rather than switching year to year on whichever looks better.
How we handle it
- 1 Confirming the scheme We check which presumptive section applies to your activity and that you are within its turnover ceiling.
- 2 Splitting receipts Turnover is split between banking and cash receipts, since the presumptive rate differs between them.
- 3 Reconciling with department data Figures are matched against Form 26AS and the annual information statement so nothing is inconsistent.
- 4 Computing under both regimes Liability is worked out under the old and new regimes and the better outcome identified.
- 5 Filing and verification The return is filed after your approval and e-verified, without which it is not treated as filed.
Frequently asked questions
What is the benefit of presumptive taxation?
No requirement to maintain detailed books, no tax audit within the applicable limits, and a much simpler return. The cost is that you cannot claim your actual expenses.
What if my actual profit is lower than the presumptive rate?
You may declare the lower figure, but then you must maintain books and undergo a tax audit where the thresholds apply, and you lose access to 44AD for the next five assessment years.
Which professionals qualify under 44ADA?
Specified professions including legal, medical, engineering, architectural, accountancy, technical consultancy and interior decoration, within the prescribed receipts limit.
Is advance tax payable?
Yes, but taxpayers under 44AD and 44ADA pay the whole of it in a single instalment by 15 March, rather than in four instalments.
Can I switch between ITR-3 and ITR-4 each year?
Not freely under 44AD. Opting out triggers a five-year bar on returning to the scheme, so the choice should be made deliberately.
What is not included. Government fees, statutory charges, stamp duty, court and registry fees, digital signature costs and any third-party professional charges are separate and payable at actuals. GST applies on professional fees where indicated. Prices shown are indicative and may change without notice; we confirm the total in writing before any work begins — see our terms on pricing.
Talk to us about ITR-4 Filing (Presumptive Scheme)
Share your requirement and our team will confirm the documents needed, the exact charges and a realistic timeline — usually the same working day.
- Expert document checking before submission
- Regular status updates on WhatsApp
- Transparent professional charges
- Assistance in Marathi & English
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