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)
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) |
| 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) |
| “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) |
| 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) |
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)
- 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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