1. Who Should File ITR-4?
You are eligible for ITR-4 if you meet all these conditions:
Residential Status: You must be a Resident of India. NRIs cannot file ITR-4.
Income Limit: Your total income for the year must not exceed ₹50 Lakhs.
Presumptive Income: You earn from a business or profession and choose to pay tax on a "presumed" profit percentage rather than maintaining detailed books.
Structure: You are an Individual, HUF, or Partnership Firm (LLPs are excluded and must file ITR-5).
2. Presumptive Taxation Limits (FY 2025-26)
One of the biggest advantages of ITR-4 is that you don't need to maintain a Balance Sheet or P&L statement. You simply declare a flat profit:
| Section | Applied To | Presumptive Profit Rate | Turnover Limit |
| 44AD | Small Businesses | 6% (Digital) / 8% (Cash) | Up to ₹3 Crore (if cash < 5%) |
| 44ADA | Professionals (Docs, CAs, etc.) | 50% of Gross Receipts | Up to ₹75 Lakhs (if cash < 5%) |
| 44AE | Goods Carriages (Transport) | Fixed rate per vehicle/month | Max 10 vehicles |
3. Key Updates for 2026 (AY 2026-27)
New Due Date: Following Budget 2026, the filing deadline for ITR-4 (non-audit) has been moved to August 31, 2026 (aligned with ITR-3).
LTCG u/s 112A: You can now report Long-Term Capital Gains on listed shares/mutual funds up to ₹1.25 Lakhs directly in ITR-4. If your gains exceed this or you have other capital gains (like property), you must switch to ITR-3.
Default Tax Regime: The New Tax Regime is the default. To use the Old Regime (to claim 80C, etc.), you must file Form 10-IEA before the August deadline.
Rebate Limit: The Section 87A rebate for the New Regime covers income up to ₹12 Lakhs in 2026, meaning many ITR-4 filers may have zero tax liability.
4. Structure of the Form
ITR-4 is divided into simple blocks:
Personal Information: Aadhaar, PAN, and Bank details.
Gross Total Income: Salary, One House Property, and Other Sources (Interest/Dividends).
Business/Profession (Schedule BP): Just three fields: Name of Business, Business Code, and Gross Turnover.
Financial Particulars: Even though books aren't required, you must provide four basic figures: Sundry Debtors, Sundry Creditors, Stock-in-hand, and Cash Balance.
Deductions & Tax: Calculates the final tax after Chapter VI-A deductions (if in Old Regime).
Comparison: ITR-3 vs. ITR-4
ITR-3: For those who want to claim actual expenses (like office rent, staff salary) or have Stock Market losses to carry forward.
ITR-4: For those who want simplicity and are happy to pay tax on a fixed percentage of their turnover without keeping invoices for every tea expense.
