Archive · 23 Aug 2026
Income Tax Department Clarifies ITR-3 And ITR-4 Selection
The Income Tax Department has explained how taxpayers can choose between two tax-return forms.
ITR-4 is for certain residents who use a simpler presumptive method to calculate business or professional income.
Their total income must generally be ₹50 lakh or less.
ITR-4 may also include salary, pension, some house-property income and certain other income.
People with foreign assets, unlisted shares, carried-forward losses or some special types of income cannot use ITR-4.
ITR-3 is generally for individuals and HUFs with business or professional income who do not qualify for ITR-4.
It also applies when total income exceeds ₹50 lakh or when the taxpayer engages in F&O trading.
Taxpayers filing non-audit returns should choose the correct form before the 31 August deadline.
ITR-4 applies to eligible resident individuals, HUFs and firms using presumptive taxation.
ITR-4 requires total income of up to ₹50 lakh for the financial year.
ITR-4 can cover salary, pension, limited house-property income and certain other sources.
ITR-4 is unavailable for several cases, including foreign assets, unlisted shares, carried-forward losses and company directors.
ITR-3 generally applies to individuals and HUFs with business or professional income outside ITR-4, including income above ₹50 lakh or F&O trading.
- Who
- The Income Tax Department and taxpayers with business or professional income, including individuals, HUFs and eligible firms.
- What
- The department provided a checklist for choosing between ITR-3 and ITR-4 for AY 2026-27.
- When
- For AY 2026-27; the filing deadline for non-audit returns is 31 August.
- Where
- Through an explanation shared by the Income Tax Department on X.
- Why
- To help taxpayers select the correct income-tax return form.
- ITR-4 eligibility
- Resident individuals, HUFs and resident firms other than LLPs with eligible presumptive business or professional income.
- ITR-4 income limit
- Total income must be up to ₹50 lakh.
- Presumptive-tax sections
- Sections 44AD, 44ADA and 44AE of the Income Tax Act, 1961.
- Capital-gains limit
- ITR-4 cannot be used when specified short-term or long-term capital gains under Section 112A exceed ₹1.25 lakh.
- ITR-4 exclusions
- The form is unavailable in cases including foreign assets or income, unlisted equity shares, carried-forward losses, deferred ESOP tax, income chargeable at special rates and company directorship.
- ITR-3 applicability
- Generally applies to individuals and HUFs with business or professional income who are not eligible for ITR-1, ITR-2 or ITR-4.
- Filing deadline
- The deadline for non-audit income-tax returns is 31 August.