ITR-4 (Sugam) for AY 2026-27: Presumptive Taxation Guide
Applicable period: Financial Year 2025-26 | Assessment Year 2026-27
ITR-4, known as Sugam, is a simplified return for eligible resident individuals, HUFs and resident firms other than LLPs that declare business or professional income on a presumptive basis. It is optional and can be used only when every eligibility condition is satisfied.
Who can file ITR-4 (Sugam)?
- Resident individual, resident HUF or resident firm other than an LLP
- Total income up to ₹50 lakh
- Presumptive business income under section 44AD
- Presumptive professional income under section 44ADA
- Presumptive income from goods carriages under section 44AE
- Salary or pension income
- Income from up to two house properties
- Other-source income such as interest, dividend or family pension, excluding prohibited categories
- Agricultural income up to ₹5,000
- Long-term capital gain under section 112A up to ₹1.25 lakh
Who should not file ITR-4 (Sugam)?
- RNOR or non-resident taxpayer
- LLP or company
- Total income above ₹50 lakh
- Short-term capital gains or section 112A long-term capital gain above ₹1.25 lakh
- Income from more than two house properties
- Company director or holder of unlisted equity shares
- Foreign assets, foreign signing authority or foreign-source income
- Lottery income, racehorse income or prohibited special-rate income
- Brought-forward loss or loss to be carried forward
- Business or profession not eligible for the selected presumptive section
Documents and information required
- PAN, Aadhaar and bank details
- Turnover or gross-receipt summary
- Bank statements and digital/cash receipt breakup
- GST returns where registered
- TDS certificates, AIS, TIS and Form 26AS
- Salary, interest and property documents
- Vehicle ownership and operation details for section 44AE
- Advance-tax and self-assessment-tax challans
- Form 10-IEA acknowledgement where required for a business taxpayer opting out of the default new regime
Important points for AY 2026-27
For AY 2026-27, eligible ITR-4 taxpayers may report up to two house properties. The official FAQ also notes a specific unrealised-rent field. Section 112A long-term capital gain up to ₹1.25 lakh is permitted subject to all other ITR-4 conditions.
Special filing note
Presumptive taxation simplifies profit computation, but it does not remove the need to maintain basic turnover, banking, GST and TDS evidence. Business taxpayers who wish to opt for the old tax regime generally need to file Form 10-IEA within the applicable time.
Simple example
A resident sole proprietor with eligible section 44AD turnover, total income below ₹50 lakh, bank interest and one rented property may use ITR-4 if no disqualifying condition applies.
How to file the return online
- Log in to the official income-tax e-filing portal.
- Open e-File → Income Tax Returns → File Income Tax Return.
- Select AY 2026-27 and the correct filing mode.
- Select the applicable ITR form and filing section.
- Review pre-filled personal, income and tax information.
- Complete every applicable schedule and reconcile AIS, TIS and Form 26AS.
- Compute tax, pay any balance self-assessment tax and enter the challan.
- Preview, validate and submit the return.
- Complete e-verification using Aadhaar OTP, net banking, bank/demat EVC, DSC or another permitted method.
Common mistakes to avoid
- Selecting the return only on the basis of income level and ignoring the type of income.
- Not reconciling income and TDS with AIS, TIS and Form 26AS.
- Using an outdated utility or schema.
- Missing foreign-asset, directorship, unlisted-share, audit or loss schedules.
- Submitting the return but not completing verification within the permitted time.
Conclusion
ITR-4 (Sugam) should be filed only after confirming the taxpayer category, residential status, income heads and all restrictions. Where facts are complex, obtain professional advice before submission.
Official reference: Income Tax Department – Income Tax Return Downloads
Disclaimer: This article provides general information for Assessment Year 2026-27. It does not replace the Income-tax Act, Rules, notifications, return instructions or professional advice. Check the latest official utility and instructions before filing.