ITR for Business/Profession

## ITR-3 or ITR-4 SUGAM - Which Do You Need? The Income Tax Return for business and profession assessees covers two distinct filing paths depending on whether you maintain regular books of accounts. **ITR-3** is for taxpayers who maintain formal books - a Profit & Loss Account and Balance Sheet prepared under the Income Tax Act. This includes sole proprietors with turnover exceeding the presumptive thresholds, professionals maintaining formal accounting records, and partners in firms who receive salary or interest from the partnership. If you are required to get your accounts audited under Section 44AB, you file ITR-3. **ITR-4 SUGAM** is the simpler path for presumptive taxpayers - those eligible to declare income at deemed rates under Section 44AD (traders and businesses), Section 44ADA (professionals), or Section 44AE (goods carriage operators). No formal books are required; income is declared as a percentage of turnover. You can opt in and out of presumptive taxation freely under Section 44AD (except for the 5-year lock-in rule), and under Section 44ADA there is no lock-in restriction at all. If you are a sole proprietor with annual turnover above ₹3 crore (or ₹75 lakh for cash businesses), or a professional with gross receipts above ₹75 lakh, you do not qualify for presumptive taxation and must file ITR-3 with formal books and a tax audit under Section 44AB. **Section 44AB tax audit** applies when turnover/receipts exceed ₹1 crore (raised to ₹10 crore if 95%+ transactions are digital). The audit requires a tax professional to certify Form 3CA (if using presumptive) or Form 3CB (if using regular books) along with Form 3CD detailing every income and expense head. The certified report must be uploaded on the e-filing portal by 30 September 2026. FinTax24 coordinates the entire Section 44AB process - from identifying whether the threshold applies, to finalising books with your auditor, to uploading Form 3CD and filing ITR-3 or ITR-4 on your behalf. You receive a reviewed draft before anything is submitted. **Partner income from a partnership firm** is reported in ITR-3 under the business/profession head or other sources, not as salary. Section 40(b) limits partner salary to ₹1,50,000 per year or 90% of book profit (whichever is lower), and interest on capital is capped at 12% simple interest. Both are deductible in the firm's books but taxable in the partner's hands. **Due dates for AY 2026-27:** ITR-4 SUGAM presumptive without audit - 31 July 2026. ITR-3 with Section 44AB audit - 31 October 2026. Belated filing with Section 234F fee is allowed until 31 December 2026. Gujarat's trading and manufacturing businesses across Ahmedabad, Surat, Vadodara, Rajkot, and Jamnagar frequently cross the Section 44AB threshold. FinTax24's team in Bhavnagar and across Gujarat handles both the audit coordination and the e-filing end-to-end.