Sugam, not so Sugam: Don’t File ITR-4 Until You Check These 10 New Income Tax Changes

INTRODUCTION

As we are very close to the deadlines for filing ITRs. Hence its very important to have a better understanding of Forms of ITRs.

As there are various kinds of forms, each one has its own importance. The Central Board of Direct Taxes (CBDT) has rolled out some of the most significant changes to the ITR-4 (Sugam) form in recent memory. Whether you’re a freelancer, a small shop owner, or an independent professional under the presumptive taxation scheme, this is all you require to know before filing ITR 4.

Who Can File?

It can be filled by:

• Resident Individuals, Hindu Undivided Families (HUFs), and Partnership Firms (excluding LLPs)
• Those with a total income of up to Rs 50 lakh
• Taxpayers declaring income under the presumptive taxation scheme — Section 44AD (businesses), Section 44ADA (professionals), or Section 44AE (goods carriage operators)
• Individuals with income from salary, one- or two-house properties, and other sources, in addition to presumptive business income

Note: One relaxation for FY 25-26, i.e., taxpayers with up to two house properties can now use ITR-4, whereas previously, only those with a single house property were eligible

Mandatory Fields/Changes You Cannot Miss

1. Personal and Identity Details

Most of the particulars are prefilled in the ITR on the basis of your E-Filing Profile, but you should check to verify below details:

• PAN (Permanent Account Number): mandatory and pre-linked with Aadhaar
• Aadhaar Number: The 28-digit Aadhaar Enrolment ID is no longer accepted; it only accepts valid 12-digit Aadhaar Numbers.
• Mobile Number: mobile validation is mandatory; OTP-based verification is part of the filing workflow
• Email ID: required for all communications and e-verification

2. Bank Account Details

You should disclose all active Bank accounts under which you have any transactions during the FY. You can avoid declaring any dormant or inactive accounts.

3. Presumptive Income Details

Depending on the section applicable to you as per below, you should declare the necessary business Income.

• Section 44AD (Businesses): You must declare gross receipts and at least 6% of digital/non-cash receipts or 8% of cash receipts as profit
• Section 44ADA (Professionals): Gross receipts must be declared, with a minimum of 50% reported as income
• Section 44AE (Goods Carriage): Declare the number of vehicles owned and the income per vehicle

4. Tax Regime Selection

The new tax regime is now the default on the e-filing portal. If you wish to opt for the old regime and claim deductions, you must actively choose to do so.

If you are opting out for the first time in AY 2025-26, you must provide the acknowledgement number and details of Form 10-IEA, which must be filed before the return filing due date

A delay in filing Form 10-IEA can cost you the loss of deductions.

5. Financial Particulars of Business (Enhanced)

Following Balances are required to be reported:

*Indicates changes in FY 25-26

6. TDS Details with Section Codes

When reporting TDS in Schedule TDS, you must now specify the exact section code under which tax was deducted for example… 194A (interest), 194H (commission), 192 (salary), 194C (contractor payments), and so on.

This change is meant to enable automated cross-verification with Form 26AS and reduce the chances of credit mismatch.

7. Capital Gains (If Applicable)

Taxpayers having Long-Term Capital Gains (LTCG) up to Rs 1.25 lakh under Section 112A from listed equity shares or equity mutual funds can now report these directly in ITR-4, provided there are no capital losses to be carried forward.

If you have a capital loss to set off, you will need to file ITR-2 or ITR-3 instead.

8. Deductions Under Chapter VI-A (For those who are opting for the old Regime)

If you’re opting for the old tax regime, deduction reporting has become more detailed, as you need to select from a drop-down the exact section from 80C to 80U.

9. House Property Details (If Applicable)

For up to two house properties, taxpayers must fill in the property address, ownership details, and rental income (if any)

A new field for “unrealised rent” has been introduced in AY 2026-27, allowing landlords to disclose rent that could not be collected during the year

10. Income from Foreign Retirement Accounts (If Applicable)

Taxpayers having income from retirement accounts maintained abroad, new fields have been introduced under Section 89A for better tracking of relief claims.