Which ITR for Business Income? ITR-3, ITR-4, ITR-5 or ITR-6 in 2026 — With Due Dates and Worked Examples

If you run a shop, a factory, a consultancy or a trading desk, the first decision of tax season is which return form to use. Pick the wrong one and the tax department marks your return defective. This guide is for proprietors, freelancers, partners, firms and small company owners in India. It explains which ITR applies to business income — ITR-3, ITR-4 (Sugam), ITR-5 or ITR-6 — the 2026 eligibility rules, the due dates including the November 2026 extension for audit cases, what changes for tax year 2026-27, and seven worked cases.

Quick answer

Individuals and HUFs with business or professional income file ITR-4 (Sugam) if they declare presumptive income, are resident, have total income up to ₹50 lakh and hit none of the exclusions; otherwise they file ITR-3. Partnership firms and LLPs file ITR-5 (a non-LLP firm on the presumptive scheme may use ITR-4). Companies file ITR-6.

• ITR-4 is for presumptive income only (section 58 of the new Act; 44AD, 44ADA, 44AE earlier)

• Directors, holders of unlisted shares, F&O traders and anyone with short-term gains or carried-forward losses must use ITR-3

• AY 2026-27: non-audit business due 31 August; audit cases extended to 21 November 2026

• Returns for income from 1 April 2026 are filed in 2027 under the Income-tax Act, 2025

The four business return forms in one look

The Income Tax Department issues seven ITR forms. Three are irrelevant to business income: ITR-1 (Sahaj) and ITR-2 are for individuals with no business or professional income, and ITR-7 is for charitable trusts, political parties, institutions and similar bodies. That leaves four forms for anyone running a business or profession.

ITR-3 is the full return for individuals and Hindu undivided families who have income from business or profession. It contains a balance sheet, a profit and loss account, depreciation schedules, a GST turnover table and every schedule for other income, so it can handle almost any situation. ITR-4 (Sugam) is a short return for residents who declare business or professional income on a presumptive basis. ITR-5 is for firms, LLPs, associations of persons, bodies of individuals, co-operative societies and other entities that are not individuals, HUFs or companies. ITR-6 is for companies, other than those claiming exemption as charitable institutions.

ITR-3 vs ITR-4 vs ITR-5 vs ITR-6

	ITR-3	ITR-4 (Sugam)	ITR-5	ITR-6
Who files	Individuals, HUFs	Resident individuals, HUFs, firms (not LLPs)	Firms, LLPs, AOPs, BOIs, co-ops	Companies
Business income	Any, from books or presumptive	Presumptive only	Any	Any
Total income cap	None	₹50 lakh	None	None
Capital gains	All kinds	Only 112A LTCG up to ₹1.25 lakh	All kinds	All kinds
Balance sheet & P&L	Yes, full schedules	No (a few summary fields)	Yes	Yes, Schedule III-based
Typical user	Trader with books, F&O trader, partner, director with side business	Small shop, freelancer on 50% scheme, truck owner	Partnership firm, LLP	Private limited company, OPC

Who files

ITR-3

Individuals, HUFs

ITR-4 (Sugam)

Resident individuals, HUFs, firms (not LLPs)

ITR-5

Firms, LLPs, AOPs, BOIs, co-ops

ITR-6

Companies

Business income

ITR-3

Any, from books or presumptive

ITR-4 (Sugam)

Presumptive only

ITR-5

Any

ITR-6

Any

Total income cap

ITR-3

None

ITR-4 (Sugam)

₹50 lakh

ITR-5

None

ITR-6

None

Capital gains

ITR-3

All kinds

ITR-4 (Sugam)

Only 112A LTCG up to ₹1.25 lakh

ITR-5

All kinds

ITR-6

All kinds

Balance sheet & P&L

ITR-3

Yes, full schedules

ITR-4 (Sugam)

No (a few summary fields)

ITR-5

Yes

ITR-6

Yes, Schedule III-based

Typical user

ITR-3

Trader with books, F&O trader, partner, director with side business

ITR-4 (Sugam)

Small shop, freelancer on 50% scheme, truck owner

ITR-5

Partnership firm, LLP

ITR-6

Private limited company, OPC

Who can file ITR-4 (Sugam)

ITR-4 is the easiest return for a small business, and most of the questions come from people trying to use it. For assessment year 2026-27, rule 12 of the Income-tax Rules, 1962 (as amended by G.S.R. 226(E) on 30 March 2026) allows it for a resident individual, HUF or firm other than an LLP whose business or professional income is computed on the presumptive basis under 44AD, 44ADA or 44AE. The other income allowed alongside is salary or pension, up to two house properties (raised from one this year), interest, dividends and family pension, agricultural income up to ₹5,000, and long-term gains under section 112A up to ₹1.25 lakh.

The e-filing portal's guidance lists the people who cannot use ITR-4 even if their business is presumptive. You cannot use it if you are a director in a company; if you held unlisted equity shares at any time in the year; if you have short-term capital gains, or 112A gains above the limit; if you have any asset or financial interest outside India, signing authority in a foreign account or income from a source outside India; if tax on ESOPs has been deferred; if you have a brought-forward loss or a loss to carry forward under any head; or if total income exceeds ₹50 lakh. A resident who is "not ordinarily resident" cannot use it either.

The presumptive scheme itself has its own limits: ₹2 crore of turnover for a business, or ₹3 crore if cash receipts are no more than 5%, and ₹50 lakh or ₹75 lakh for professionals. Our guide to the presumptive taxation scheme explains those limits and the five-year lock-in. If you qualify for the scheme but fail any ITR-4 condition, you still declare presumptive income — you just report it in ITR-3.

When you need ITR-3

ITR-3 is the default for any individual or HUF with business or professional income who cannot use ITR-4. In practice that means five groups. First, anyone who declares profit from books rather than on the presumptive basis, including traders whose turnover is above the scheme limits and professionals whose real profit is below 50% of receipts. Second, partners in a firm who receive salary, interest, bonus or commission from the firm: the share of profit is exempt in their hands, but the remuneration is business income and cannot be reported in ITR-4.

Third, futures and options traders and intraday share traders. F&O income is non-speculative business income and intraday equity trading is speculative business income; neither can be presumptive. Fourth, anyone whose other income takes them outside ITR-4: a director in any company, a holder of unlisted shares, someone with short-term capital gains, a foreign asset or a carried-forward loss. Fifth, anyone with total income above ₹50 lakh.

Because ITR-3 contains a full balance sheet and profit and loss account, you need proper books, prepared on the accrual basis, before you start. Our guides on the profit and loss statement and the balance sheet explain the layout. If you only have bank statements and a sales register, ITR-3 has a "no account case" section where you report gross receipts, gross profit, expenses and net profit, but you still need reliable figures for each.

ITR-3 is also where you report a tax audit. If your accounts were audited under the income-tax law, the return quotes the audit report's acknowledgement number and date, and the audit report must be uploaded first. That is why audit cases have a later due date.

ITR-5 for firms and LLPs, ITR-6 for companies

A partnership firm, whether registered or not, files ITR-5 unless it can use ITR-4. A firm can use ITR-4 only if it is resident, is not an LLP, declares presumptive income and has total income within the ITR-4 limit. Firms are taxed at a flat 30% (plus surcharge and cess), and in ITR-5 they deduct partners' salary and interest within the limits in the law and the partnership deed. The partners then report that salary and interest in their own ITR-3.

An LLP always files ITR-5, because neither the presumptive scheme nor ITR-4 is open to LLPs. Associations of persons, bodies of individuals, co-operative societies, artificial juridical persons and the estates of deceased or insolvent persons also file ITR-5.

Every company — private limited, public, one person company — files ITR-6 unless it claims exemption as a charitable or religious institution, in which case it files ITR-7. A company's accounts are always audited under the Companies Act, so its return falls in the audit-case due date, and it must verify the return with a digital signature certificate. The figures in ITR-6 come straight from the audited Schedule III financial statements, so the return cannot be finished until the statutory audit is done.

ITR due dates for business income

The Finance Act, 2026 changed the due dates for businesses that do not need an audit. Until last year, a proprietor or firm without an audit had to file by 31 July, the same day as salaried people. From assessment year 2026-27 under the 1961 Act, and from tax year 2026-27 under the 2025 Act, those cases — and partners of such firms — get until 31 August. ITR-1 and ITR-2 filers stay at 31 July.

For audit cases and companies, the normal due date is 31 October, and the tax audit report must be filed one month before it. For assessment year 2026-27, CBDT Circular No. 07/2026 of 28 September 2026 extended the return date to 21 November 2026 and, as a result, the audit report date to 21 October 2026. Businesses with international or specified domestic transactions that need a transfer-pricing report have until 30 November.

If you have missed the date

A non-audit business that missed 31 August 2026 can still file a belated return for assessment year 2026-27 by 31 December 2026, with a late fee of ₹1,000 if total income is up to ₹5 lakh, otherwise ₹5,000 and interest on any unpaid tax. A belated return cannot carry forward business losses, which is the biggest cost for a loss-making business. The Finance Act, 2026 also extended the window for a revised return to twelve months from the end of the tax year (31 March), so for assessment year 2026-27 you can correct a return up to 31 March 2027, paying a fee if you revise after 31 December. Beyond that, an updated return (ITR-U) is possible within the time limits the law allows, with additional tax.

Worked examples: choosing the form

1. Kirana store on the presumptive scheme. Lakshmi runs a grocery store in Coimbatore with ₹1.8 crore turnover, almost all through UPI. She declares 6% presumptive profit, has ₹40,000 of savings interest and no other income. Total income is about ₹11 lakh, she is not a director and has no shares. She files ITR-4 by 31 August.

2. The same store, plus a share sale. If Lakshmi also sold shares she had held for eight months, she now has short-term capital gains. ITR-4 no longer works. She files ITR-3, still declaring her shop income on the presumptive basis, and reports the gain in the capital gains schedule.

3. Software consultant. Arjun, an IT consultant in Pune, has gross receipts of ₹62 lakh, all by bank transfer, so he is within the ₹75 lakh limit for professionals. He declares 50%, or ₹31 lakh. Total income is under ₹50 lakh and he has no exclusions, so ITR-4. If next year his receipts reach ₹1.2 crore, he is outside the scheme, must keep books, will need a tax audit because professional receipts exceed ₹50 lakh, and files ITR-3 by the audit-case date.

How to pick the right form

1. 1

   List the taxpayer type

   Company → ITR-6. Firm, LLP, AOP, co-operative → ITR-5 (non-LLP firm on presumptive income may use ITR-4). Individual or HUF → go on.

2. 2

   Is the business income presumptive?

   If not — profit from books, F&O, partner's remuneration — file ITR-3.

3. 3

   Check total income

   Above ₹50 lakh? File ITR-3.

4. 4

   Run the exclusion list

   Director, unlisted shares, short-term gains, 112A gains above ₹1.25 lakh, foreign assets or income, carried-forward losses, deferred ESOP tax, more than two house properties → ITR-3.

5. 5

   Otherwise, ITR-4

   File ITR-4 (Sugam) and e-verify within 30 days.

4. Partner in a firm. Sunil is a partner in a registered textile trading firm and draws salary and interest from it. The firm files ITR-5 (or ITR-4 if it is on the presumptive scheme and qualifies). Sunil's salary and interest from the firm are business income in his hands, so he files ITR-3 even if it is his only income.

5. Salaried employee who trades F&O. Priya earns a salary and trades index options on weekends. Her options income is business income, so she files ITR-3, not ITR-1 or ITR-2. If she has a loss she wants to carry forward, she must file by the due date.

6. Director with a side business. Kiran owns a small consultancy on the presumptive scheme but is also a director of a family company. Directors are excluded from ITR-4, so he files ITR-3 and declares the consultancy on the presumptive basis in it.

7. Private limited company. A manufacturing MSME incorporated as a private limited company files ITR-6. For the year ended 31 March 2026, it had until 21 November 2026, after Circular 07/2026.

What changes for tax year 2026-27

Income earned on or after 1 April 2026 is taxed under the Income-tax Act, 2025. The new law drops "assessment year"; the year of income is simply the tax year, and the return for tax year 2026-27 will be filed between April and November 2027. The Income Tax Department's FAQ on the new Act makes clear that the 1961 Act continues to govern earlier years, so every return being filed now — including late, revised and updated returns for 2025-26 and before — uses the old Act and the forms notified under the old rules.

For the new Act, the return due dates are set by section 263(1)(c), which the Finance Act, 2026 amended to the same 31 July, 31 August, 31 October and 30 November pattern. Presumptive income moves from 44AD, 44ADA and 44AE to section 58. The forms themselves will be prescribed under the Income-tax Rules, 2026. The draft rules released in February 2026 kept the familiar ITR-1 to ITR-7 structure, with tighter ITR-4 conditions, so the choice explained in this guide is expected to carry over. Until the final forms for tax year 2026-27 are notified, treat the AY 2026-27 rules as the guide and check the e-filing portal before you file in 2027. Our explainer on the financial year, assessment year and tax year covers the transition in more detail.

Before you file a business ITR

0/7

• Decide the taxpayer type: individual/HUF, firm/LLP or company
• Confirm whether income is presumptive or from books
• Collect the capital gains statement, directorship details and unlisted-share holdings
• Reconcile turnover with GSTR-1/3B, the annual information statement and TDS credits
• If audited, upload the audit report before the return
• Pay any balance tax with interest before filing
• File by the due date and e-verify within 30 days

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Common mistakes with business returns

Using ITR-4 while being a director. This is the most common error among small business owners who sit on the board of a family company. The return is flagged as defective. Use ITR-3.

Forgetting a small capital gain. A single mutual fund redemption that produced a short-term gain, or long-term equity gains above ₹1.25 lakh, takes you out of ITR-4. Check your capital gains statement from the depository or fund house before choosing.

Reporting turnover that does not match GST and the annual information statement. The department compares the turnover in your return with GSTR-1 and GSTR-3B figures and with TDS credits under your PAN. Differences trigger notices. Reconcile first, and explain any genuine differences such as exempt sales or advances.

Not claiming TDS deducted by customers. Customers who pay you for contracts, professional fees or rent often deduct TDS. It shows in your annual tax statement and must be claimed in the return, matching the receipts you report. Our guide to TDS explains the sections.

Missing the due date with a loss. A business loss can be carried forward only if the return is filed on time. A belated ITR-3 loses that benefit.

Not e-verifying. A return is complete only after verification. Most individuals verify by Aadhaar OTP or net banking; if you do not verify within 30 days of filing, the date of verification is treated as the filing date, which can make the return late.

Official links

• Income Tax e-filing portalDownload utilities, file and e-verify returns
• Which ITR applies — individuals and HUFsITR-3 and ITR-4 eligibility and exclusions
• Finance Bill 2026 — Memorandum31 August due date and 12-month revised return
• FAQs on the Income-tax Act, 2025How the new Act applies from tax year 2026-27

What to do next

Write down every income you had this year — business, salary, rent, interest, share sales — and your role in any company, then run the five steps above. If you are close to the line between presumptive and actual profit, read our presumptive taxation guide first; if you need books for ITR-3, start with the profit and loss statement. For an audit case, keep 21 October 2026 and 21 November 2026 in the calendar.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

Which ITR should a proprietor with business income file?

A proprietor files either ITR-4 (Sugam) or ITR-3. ITR-4 is for residents who declare business or professional income on the presumptive basis, have total income up to ₹50 lakh and fall under none of the exclusions, such as being a company director. Every other proprietor, including anyone declaring profit from books, files ITR-3, which has full balance sheet and profit and loss schedules.

What is the difference between ITR-3 and ITR-4?

ITR-4 is a short return for presumptive income: you report turnover and the deemed profit, plus salary, up to two house properties, interest and small long-term equity gains. ITR-3 covers any kind of business or professional income computed from books, capital gains of every kind, losses carried forward, foreign assets and directorships. ITR-4 also has a ₹50 lakh total income ceiling; ITR-3 has none.

Which ITR is for a partnership firm or LLP?

A partnership firm files ITR-5, unless it is a resident firm other than an LLP declaring presumptive income with total income within ₹50 lakh, in which case ITR-4 is allowed. An LLP always files ITR-5. The partners themselves file ITR-3 if they receive salary, interest or commission from the firm, because that is business income in their hands.

What is the last date to file ITR for business income in 2026?

For assessment year 2026-27, business and professional cases not liable to audit had until 31 August 2026, after the Finance Act, 2026 moved the date from 31 July. Companies and audit cases have until 21 November 2026 under CBDT Circular 07/2026, with the audit report due by 21 October 2026. Transfer-pricing cases have until 30 November.

Can I file ITR-4 if I trade in F&O or shares?

No. Futures and options trading is business income that cannot be declared on a presumptive basis in ITR-4, and short-term capital gains from shares also rule ITR-4 out. Only long-term gains under section 112A up to ₹1.25 lakh are allowed in ITR-4. A trader or investor with these incomes files ITR-3, and may also need a tax audit depending on turnover and profit.

What happens if I file the wrong ITR form?

The Centralised Processing Centre treats the return as defective and sends a notice asking you to correct it, usually within 15 days. You fix it by filing the right form in response to the notice. If you do not, the return can be treated as invalid, which means you are treated as never having filed — with late fees, interest and lost carry-forward of losses.

Which ITR form will apply for tax year 2026-27?

Income earned from 1 April 2026 is taxed under the Income-tax Act, 2025, and the return for tax year 2026-27 will be filed in 2027 on forms issued under the Income-tax Rules, 2026. The draft rules kept the ITR-1 to ITR-7 structure, so the same choice between ITR-3, ITR-4, ITR-5 and ITR-6 is expected. Check the notified forms on the e-filing portal before filing.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.ITR applicability for individuals and HUFs (ITR-1 to ITR-4) — Income Tax Department (e-filing portal) · accessed 9 October 2026
2. 2.Finance Bill 2026 — Memorandum explaining provisions (direct taxes) — Ministry of Finance (India Budget) · accessed 9 October 2026
3. 3.CBDT Circular No. 07/2026 (28 September 2026) — extension of due dates for audit reports and ITRs, AY 2026-27 — Central Board of Direct Taxes (copy on CAalley) · accessed 9 October 2026
4. 4.Objective and scope of the new Act (Income-tax Act, 2025) — FAQs — Income Tax Department (e-filing portal) · accessed 9 October 2026
5. 5.Income-tax Amendment Rules 2026: key changes in ITR forms for AY 2026-27 — SCC Online · accessed 9 October 2026
6. 6.Income-tax (Second Amendment) Rules, 2026 — G.S.R. 226(E) — TeamLease RegTech · accessed 9 October 2026
7. 7.Draft income tax rules 2026 signal tighter eligibility and digital-first filing for ITR-1 to ITR-7 — Business Today · accessed 9 October 2026