ITR-4 Sugam and Presumptive Taxation — Sections 44AD (6% / 8% of Turnover up to ₹3 Crore), 44ADA (50% of Receipts up to ₹75 Lakh) and 44AE (Goods Vehicles): Who Can Use It, the No-Books No-Audit Deal, the Five-Year Lock-In, How to Fill ITR-4 and When ITR-3 Is the Better Choice

• •All deductions under sections 30 to 38 (rent, salaries, depreciation, interest) are deemed already allowed — nothing more can be claimed against the presumptive income; the written-down value of assets is still reduced by notional depreciation.
• •Partnership firms under 44AD/44ADA cannot deduct partners' remuneration and interest separately from the deemed income (the 2016 amendment) — the deemed figure is final.
• •Chapter VI-A deductions (80C, 80D…) and the regime choice apply to the total income as usual; the presumptive income is simply the business/profession head.
• •GST and income tax turnover must match; the AIS shows the GST-reported turnover and the department compares it with the 44AD figure.

ITR-4 is the short form for presumptive taxpayers: a resident individual, HUF or partnership firm (other than an LLP) with total income up to ₹50 lakh, income from business or profession computed under 44AD, 44ADA or 44AE, plus salary or pension, one house property, other sources and agricultural income up to ₹5,000, and from this year LTCG under section 112A within the ₹1.25 lakh exemption. It cannot be used by directors, holders of unlisted shares, those with foreign assets or income, non-residents, anyone with capital gains beyond that exemption, more than one house property, brought-forward losses, 194N TDS, deferred ESOP tax, or income above ₹50 lakh — such a presumptive taxpayer files ITR-3 and declares the presumptive income there.

1. 1Once you declare income under 44AD, you are expected to continue for five consecutive years. Declare a lower profit than 6%/8% in any of those years (with total income above the basic exemption) and you lose 44AD for the next five years — and must keep books and get audited under section 44AB for the year you opted out.
2. 244ADA has no five-year lock: a professional may declare 50% one year and actual profit with books the next, but declaring less than 50% with income above the exemption requires books and an audit under 44AB(d).
3. 344AE has no lock either; declaring less than the deemed amount needs books and audit.
4. 4Turnover crossing the limit (₹2/3 crore, ₹50/75 lakh) ends eligibility for that year — the whole income is computed under normal provisions with books, and audit applies if the 44AB thresholds are crossed.
5. 5The 5% cash test counts receipts, not payments, and includes cheques that are not account-payee; keep the bank statement evidence.

1. 1Part A: personal details, regime choice (Form 10-IEA is needed to opt out of the new regime because there is business income; the choice binds for future years until you switch back once), whether books are maintained (no), and the 44AD/44ADA/44AE history.
2. 2Schedule BP: gross turnover split into digital and cash receipts, the deemed income at 6%/8%; for 44ADA the gross receipts and 50%; for 44AE the vehicle-wise table (registration, tonnage, months owned).
3. 3Financial particulars: sundry debtors, sundry creditors, stock-in-trade and cash balance as on 31 March — mandatory even without books; GSTIN and GST turnover.
4. 4Salary, house property, other sources and the 112A gains schedule as applicable; deductions under VI-A in the old regime.
5. 5Tax paid: TDS/TCS from 26AS, advance tax — presumptive taxpayers pay the whole advance tax in one instalment by 15 March (interest under 234C only if that is missed), self-assessment tax if any.
6. 6Submit, e-verify within 30 days; due date 31 August (no audit); a belated ITR-4 attracts the ₹5,000 fee and loses the old-regime option.