Question 1

What are the presumptive rates under Sections 44AD, 44ADA, and 44AE?

Accepted Answer

The deemed income depends on the scheme you opt for:

• Section 44AD (eligible small businesses): 8% of turnover for cash receipts, 6% for digital receipts. Available for turnover up to ₹2 crore (₹3 crore where cash receipts are within 5%).
• Section 44ADA (specified professionals such as legal, medical, engineering, accountancy, technical consultancy): 50% of gross receipts. Available for gross receipts up to ₹50 lakh (₹75 lakh where cash receipts are within 5%).
• Section 44AE (goods carriages): fixed per-vehicle income depending on tonnage, for operators owning up to 10 vehicles.

Question 2

Who cannot file ITR-4?

Accepted Answer

ITR-4 is not available in any of the following situations:

• Gross income exceeds ₹50 lakh.
• You have capital gains, foreign income, or foreign assets.
• You hold unlisted equity shares or have signing authority in a foreign account.
• You own more than one house property.
• You are a company director.
• You are an NRI or RNOR.
• You want to carry forward losses from earlier years.

In any of these cases, ITR-3 is the correct form.

Question 3

What is the 5-year lock-in under Section 44AD?

Accepted Answer

Once you opt into 44AD presumptive taxation, you have to stay in it for at least 5 consecutive assessment years. If you opt out earlier (typically by filing ITR-3 with actual profits), you lose 44AD eligibility for the next 5 assessment years and tax audit becomes mandatory if your income exceeds the basic exemption limit. We plan this carefully so you don't trigger the lock-in by mistake.

Question 4

Do I need to maintain books of accounts under presumptive taxation?

Accepted Answer

Not in the strict statutory sense, since the income is deemed at the prescribed rate. That said, we still recommend keeping basic records, sales register, bank statements, GST returns, and major expense receipts. These help if the Income Tax Department issues a notice or if you ever exit the presumptive scheme and need to substantiate actual profits.

Question 5

Who is eligible to file ITR-4 / Sugam?

Accepted Answer

ITR-4 is the simplified return for small businesses and professionals opting into presumptive taxation, with total income up to ₹50 lakh. It is available to:

• Resident individuals and HUFs.
• Partnership firms (other than LLPs) that are residents of India.
• Taxpayers using presumptive income schemes under Sections 44AD (eligible businesses), 44ADA (specified professionals), or 44AE (goods carriages).

Non-residents, LLPs, companies, and anyone with capital gains, foreign income, or director status have to move to ITR-3, ITR-5, or ITR-6 as applicable.

ITR-4 / Sugam Return Filing

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Our Process

Share Turnover Data

Apply Presumptive Calculation

Confirm & File

Verify & Acknowledge

Documents & Information Required

Basic Information

Property

Other Income

Business / Profession

Deductions

Eligibility

Who Can

Who Cannot

Features

Presumptive Tax

Faster Filing

Audit Exemption

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Frequently Asked Questions

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