Income Tax Return Filing: Complete ITR Form 4 Checklist for AY 2025-26 for Small Business Owners

With the onset of the Income Tax Return (ITR) filing season for Assessment Year (AY) 2025–26, taxpayers must identify the correct form that matches their income sources.

ITR Form 4 (Sugam) is to be filed by small business owners, professionals, and individuals under the presumptive taxation scheme. Filing under the correct form ensures a smooth return processing and minimizes the risk of notices or scrutiny.

What is ITR Form 4 (Sugam)

ITR Form 4, commonly referred to as “Sugam,” is a simplified return form for taxpayers who opt for the presumptive income scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act. It caters to individuals, HUFs, and firms (other than LLPs) with presumptive income from business or profession.

Who is Eligible to File ITR-4

The following persons can file ITR-4:

Resident Individuals, HUFs, and Firms (other than LLPs) with Income up to ₹50 lakh

Business income under Section 44AD or 44AE

Professional income under Section 44ADA

Income from salary/pension, one house property, and other sources (interest, etc.)

Confused by Complex GST Provisions and Legal Disputes in Real Estate? Get Clarity and Practical Solutions from Industry Experts- Enroll Now

Who is Not Eligible to File ITR-4

ITR-4 should not be used by:

• Individuals with income above ₹50 lakh

• Directors of a company or individuals holding unlisted equity shares

• Taxpayers with foreign income or foreign assets

• Individuals who have agricultural income above ₹5,000

• Those claiming capital gains, or income from more than one house property

• Individuals liable for audit under Sections 44AB

What are the Types of Income That Shall Not Form Part of ITR-4

• Capital gains (short-term or long-term)

• Income from more than one house property

• Speculative business income or income from commission and brokerage

• Foreign income or assets

• Income from maintaining books of accounts (regular scheme)

Mentioning Nature of Business/Profession While Filing Return

Taxpayers must accurately specify the nature of their business or profession using the appropriate codes provided by the Income Tax Department. This is mandatory for those declaring income under Section 44AD or 44ADA. Mismatch or incorrect disclosure may lead to notice or mismatch errors.

Documents Required to File ITR-4

Confused by Complex GST Provisions and Legal Disputes in Real Estate? Get Clarity and Practical Solutions from Industry Experts- Enroll Now

While no documents are to be attached with the return, keep the following ready:

• Aadhaar and PAN details

• Form 26AS and AIS (Annual Information Statement)

• Bank account details

• Salary slips/Form 16 (if applicable)

• Books of accounts (if maintained)

• Previous year’s ITR

• Details of business turnover/gross receipts

• Details of all deductions and exemptions claimed

• Tax computation sheet

• Challan details of Advance Tax or Self-Assessment Tax paid

Precautions While Filing the Return of Income

Ensure correct selection of ITR form based on your income

Mention accurate turnover or gross receipts

Validate the mobile number and email ID linked with PAN

Reconcile Form 26AS and AIS with your reported income

Report interest and other income from savings/current accounts

Double-check bank account details for refunds

Use the latest utility provided by the Income Tax portal

Default Regime

For AY 2025–26, the default tax regime remains the new regime under Section 115BAC(1A), unless the taxpayer explicitly opts out. Taxpayers using ITR-4 must confirm whether they are opting in or out of the new regime during filing.

Precautions to Avoid Issues While Filing ITR

• Report all sources of income correctly, including presumptive income
• Avoid under-reporting or omission of interest income
• File within the due date (July 31, 2025 for non-audit cases)
• Verify the return after submission to complete the process
• Keep acknowledgment for future reference

ITR-4 (Sugam) Filing Checklist for AY 2025-26

• Check eligibility under presumptive taxation
• Keep PAN, Aadhaar, and bank details ready
• Download and reconcile Form 26AS and AIS
• Determine business code based on your profession
• Confirm turnover/gross receipts figures
• Fill in accurate figures for income and deductions
• Choose between old and new tax regimes
• Validate return using OTP or DSC
• E-verify the return within 30 days
• Preserve ITR-V and Computation Summary

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates