6 changes in ITR-4 for presumptive taxation for AY27

Income Tax Return form ITR-4, also known as Sugam, is a simplified form available to resident individuals, HUFs, and firms (excluding LLPs) who opt for presumptive taxation under Sections 44AD, 44ADA, or 44AE. This form is required to be filed by taxpayers with income not exceeding Rs 50 Lakh during the financial year, who earn income from a business or profession computed on a presumptive basis, have long-term capital gains up to Rs.1.25 lakhs, receive salary/pension, own one house property, have agricultural income up to ₹ 5000/-, or have other sources of income (excluding lottery winnings and racehorse income).

Under the presumptive taxation scheme, eligible taxpayers can declare their income at a prescribed rate instead of calculating their actual business or professional profits and maintaining detailed books of account. This scheme is designed to relieve small taxpayers from the burden of compliance. However, to be eligible for ITR-4, taxpayers must meet certain specific conditions outlined in the Income Tax Act.

Some key changes and reporting requirements for ITR-4 include additional disclosure requirements for investments made under the presumptive taxation scheme, reporting income or loss from up to two house properties, providing owner, co-owner, and tenant details for house properties, claiming the deduction under Section 80GGC, removing the earlier reporting requirement for relief under Section 89A, adding a secondary address option, and filing Form 10-IEA to opt for the old tax regime or switch back to the new tax regime.

Business income taxpayers are not eligible to choose between the new and old tax regimes every year; they can only switch back to the new regime once in their lifetime.