ITR-4 (Sugam)
ITR-4, called Sugam, is the return for presumptive income under section 44AD, 44ADA, or 44AE, when total income is up to ₹50 lakh. Company Suggestion uses it for a resident individual, a Hindu undivided family, or a firm other than an LLP. A case outside those sections is ITR-3.
Who can file ITR-4?
All of these must be true.
- The person is a resident individual, a resident HUF, or a partnership firm that is not an LLP.
- Business or professional income is computed under section 44AD, 44ADA, or 44AE.
- Total income is up to ₹50 lakh.
- There is no foreign asset, no directorship, and no unlisted equity share.
What income does the scheme deem?
The scheme taxes a fixed share of receipts. Books are not required while the person stays inside it.
- Section 44AD, for an eligible business: 8 per cent of turnover, or 6 per cent of the digital receipts. Turnover up to ₹2 crore, or ₹3 crore when cash receipts are within 5 per cent.
- Section 44ADA, for a specified profession: 50 per cent of gross receipts. Receipts up to ₹50 lakh, or ₹75 lakh when cash receipts are within 5 per cent.
- Section 44AE, for a person who owns goods carriages, up to ten vehicles, at the per-vehicle amount the section states.
Declaring less than the deemed profit is allowed. If income then exceeds the basic exemption, a tax audit under section 44AB is required and the form becomes ITR-3.
Who cannot use Sugam?
The form instructions refuse ITR-4 in these cases.
- A non-resident, or a resident but not ordinarily resident.
- An LLP, a company, or an association of persons.
- Turnover or receipts above the section limit, or total income above ₹50 lakh.
- More than one house property, a brought-forward loss, or capital gains other than a long-term gain under section 112A up to ₹1.25 lakh when the form allows it.
- A directorship, unlisted equity, or a foreign asset.
What are the filing steps?
Company Suggestion files Sugam in four steps.
- Turnover, cash receipts, and the profession are checked against 44AD, 44ADA, or 44AE.
- The deemed income is computed at 8 or 6 per cent, or at 50 per cent for a profession.
- ITR-4 is uploaded. With no audit, the date is 31 July unless the department extends it.
- The return is e-verified within 30 days.
Frequently asked questions
4 questions cover the rules that decide this registration.
What is the turnover limit under section 44AD?
₹2 crore. It is ₹3 crore when the amounts received in cash during the year do not exceed 5 per cent of turnover. The deemed profit is 8 per cent, or 6 per cent of the receipts that came through a bank or a prescribed electronic mode.
What is the limit under section 44ADA?
Gross receipts of ₹50 lakh, or ₹75 lakh when cash receipts do not exceed 5 per cent. The deemed profit is 50 per cent of the gross receipts.
What if the real profit is below the deemed rate?
The person can declare the lower profit. If total income then exceeds the exemption, section 44AB requires a tax audit, and the return is ITR-3 rather than ITR-4.
Can an LLP file ITR-4?
No. ITR-4 is open to a firm other than an LLP. An LLP files ITR-5.