The return forms get a small facelift most years — a column here, a re-worded heading there. This year is different for the lakhs of small businesses and professionals who file under the presumptive scheme. The ITR-4 (Sugam) for Assessment Year 2026-27 carries a set of changes that point in one clear direction: the department wants a fuller, more verifiable year-end picture, even though presumptive taxpayers are still spared the burden of maintaining books.
Bank balance is no longer optional
The “Financial Particulars of the Business” schedule always asked for a few figures — sundry debtors, creditors, inventory, cash in hand. Bank balance was there, but no one treated it as compulsory. That has changed. The closing balance with banks as on 31 March must now be reported in Field E21, and it is mandatory.
The mechanics are simple: add up the closing balances of all business bank accounts as on 31 March and enter the single combined figure in E21. Savings and current accounts used for the business go in, as do overdraft or cash credit accounts showing a positive balance. Where an OD or CC account is negative, do not net it off against E21 — report the positive balances and handle the negative figure separately.
This figure does not sit in isolation. The department already holds the banking trail, AIS, SFT data and, where applicable, GST turnover. A bank balance that looks implausible against declared turnover is exactly the kind of mismatch that invites a notice. The sensible habit is to reconcile E21 against the 31 March statement and keep the working on file.
A new Investments field
Less discussed but equally telling is the new “Investments” line at Field E18a in the same schedule. The asset side of the simplified balance sheet was thin until now; this asks the filer for a more structured statement of what the business holds at year-end. For genuine small businesses it is a non-event — you report what you hold. But the year-end snapshot now has to hang together internally, so it is worth a second look before filing.
The deadline has shifted, permanently
For non-audit ITR-4 filers, the due date is now 31 August, not the familiar 31 July. This is not a one-off extension — it is a permanent shift under the Finance Act 2026. Worth updating the compliance calendar and telling clients early, so the extra month does not quietly turn into an extra month of procrastination. One related point that is easy to forget: presumptive taxpayers pay advance tax in a single instalment by 15 March, not across four. The deadline change does not touch that.
Eligibility and limits
The architecture is unchanged, but clients ask every year. ITR-4 is for resident individuals, HUFs and firms (other than LLPs) opting for presumptive taxation, with total income up to Rs 50 lakh. The scheme limits:
- Section 44AD (business): turnover up to Rs 3 crore, or Rs 2 crore if cash receipts exceed 5% of total receipts.
- Section 44ADA (professionals): gross receipts up to Rs 75 lakh, or Rs 37.5 lakh if cash receipts exceed 5%.
- Section 44AE (goods transport): up to 10 vehicles held at any time during the year.
A small relief carries forward: limited long-term capital gains under Section 112A, up to Rs 1.25 lakh, can still be reported in ITR-4 rather than forcing a move to ITR-3.
Regime selection and smaller touches
The new tax regime under Section 115BAC(1A) is the default. Opting for the old regime is now a conscious in-form choice each year, routed through Form 10-IEA, which must be filed before the due date. If a client opted out earlier, that choice has to be confirmed or revisited — it does not carry over on its own. The form also now allows two phone-and-email pairs, a small convenience for those who keep separate professional contact details.
On whether ITR-4 now permits two house properties, treat the point with care. Commentary is divided: some read the two-property relaxation as extending to ITR-4 alongside ITR-1, others keep ITR-4 at a single house property and push two-property cases into ITR-3. Until it is settled against the live utility, assume ITR-3 may be needed for a two-house client and verify before committing.
The takeaway
None of these changes is dramatic alone — a bank balance field, an investments line, a moved deadline. But the direction is unmistakable. The presumptive bargain stands: declare a fixed percentage of turnover, skip the books, file simply. What the department now asks in return is a more honest, verifiable year-end statement. The taxpayer who keeps clean banking records and reconciles before filing will find the new ITR-4 no harder than the old one. The one who treated presumptive taxation as a place to be vague will find that space has narrowed. For practitioners, build the reconciliation and the investments figure into the filing checklist now, flag the August deadline early, and confirm the regime position up front.
The tightening the article describes mainly affects three things for AY 2026-27.
First, ITR-4 now requires asset and liability disclosure in Part E for individuals who earn above Rs 50 lakh , even if they are filing under the presumptive scheme. Earlier this was only needed if you were maintaining full accounts (ITR-3). If you are a Section 44ADA professional earning above the threshold, check whether your movable and immovable assets need to be declared.
Second, there is now a mandatory capital gains reconciliation field for equity transactions even for ITR-4 filers. If you had any equity redemptions or LTCG in the year, the utility flags a mismatch if you do not fill in the Schedule CG details. This is catching many presumptive filers by surprise because earlier ITR-4 accepted zero in CG without requiring details.
Third, the eligibility check for Section 44ADA is now hardcoded in the utility: if gross receipts exceed Rs 75 lakh (revised limit from AY 2026-27), the utility routes you to ITR-3. The Rs 50 lakh limit from earlier years no longer applies to designated professionals.
For most Section 44ADA filers (doctors, CAs, architects, tech consultants, freelancers in specified professions), the filing workflow is otherwise unchanged. The key watch-out is the asset disclosure trigger and the capital gains schedule.
Thank you for the detailed comment — much appreciated.
Two small points: ITR-4 is itself capped at total income of Rs 50 lakh, so anyone above that moves to ITR-3, where Schedule AL applies; Part E is the business financial particulars schedule and applies to all filers.
Also, the Rs 75 lakh under 44ADA is not new for AY 2026-27 — it came in with the Finance Act 2023 from AY 2024-25, and only where cash receipts stay within 5% of gross receipts.
Your point on checking equity transactions before choosing the form is well taken.