Compliance
India’s ITR-4 “Sugam” Reforms: Who Eligibility is Expanded & What It Means
India’s ITR-4 eligibility under AY 2026-27 has widened—learn who qualifies, new fields in the form, and how to assess if the presumptive taxation route makes sense for you.
By NomadicTax Research Team • 5-8 min read • September 15, 2026
## Overview
India’s ITR-4 (Sugam) form is used by certain small taxpayers to declare income under the **presumptive taxation scheme**—allowing simpler compliance without detailed books. As of AY 2026-27 (FY 2025-26), there are **notable new eligibility changes and reporting additions**. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/file-itr-4-sugam-online?utm_source=openai))
## What's Changed for AY 2026-27
| Feature | Before AY 2026-27 | Now / New Under AY 2026-27 |
|---------|---------------------|-----------------------------|
| Upper income limit | ₹50 lakh overall income from business/profession etc. through presumptive section | Still ₹50 lakh, but new conditions apply for foreign assets and capital gains; added fields in form. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/file-itr-4-sugam-online?utm_source=openai)) |
| House property disclosure | Only one house property could usually be declared | Now eligibility to report income from **up to two house properties** in ITR-4 form for those qualifying under presumptive scheme. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/file-itr-4-sugam-online?utm_source=openai)) |
| “Unrealised Rent” | No separate field | New field introduced to declare rent that cannot realistically be collected, for example if tenant vacates but hasn't vacated in records etc. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/file-itr-4-sugam-online?utm_source=openai)) |
| Foreign asset reporting | Required historically under certain sections | Requirement to report **foreign retirement benefits** has been removed from ITR-4 for AY 2026-27. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/file-itr-4-sugam-online?utm_source=openai)) |
## Actionable Insights: Should You Use ITR-4?
- **Compare presumptive vs regular regime**: Presumptive simplifies but disallows many deductions you might get under regular ITRs. If your business expenses are high, regular may still be advantageous.
- **Make use of new fields**: If you've more than one house property or unrealized rent, ensure proper disclosure to avoid trouble.
- **Check foreign assets/tax residency**: Though reporting of foreign retirement benefits is removed, other foreign assets / income might still need disclosure under other laws.
## Practical Examples
- **Example 1**: An individual earns ₹45 lakh via service business under presumptive section, owns **two rented houses**, one with unpaid rent. He can now file ITR-4, report both house incomes, and show “unrealised rent” for the problematic property.
- **Example 2**: Content creator with foreign retirement plan previously required to report this under ITR-4. Now this is exempt under ITR-4—but check whether regular regime requires reporting elsewhere.
## Caveats & Compliance Tips
- **Due date remains**: ITR-4 must be filed by **31 August 2026** for AY 2026-27. Missing this incurs late filing fees and interest. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/file-itr-4-sugam-online?utm_source=openai))
- **Old vs New Tax Regime**: Under new default regime (Finance Act 2023, via section 115BAC), ITR-4 might carry fewer deductions. You have to opt‐out formally for regular old regime if eligible and better. ��
- **Record keeping**: Especially for “unrealised rent” and foreign income/benefits. Maintain documentation to show effort to collect rent, eviction notices etc.
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