Filing your ITR 4 for AY 2025-26 under the new tax regime might appear complex if you have multiple sources of income. This blog post breaks it down in a simplified, step-by-step format for individuals below 60 years of age with business income, rental income, capital gains, and deductions.
Understanding the Taxpayer Profile
Before we proceed to file ITR 4 for AY 2025-26 under the new tax regime, here is the financial snapshot:
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Age: Below 60 years
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Business Income: ₹30,00,000 (banked) + ₹5,80,000 (cash)
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Rental Income: ₹1,20,000 (annual)
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Notional Housing Loan Interest: ₹2,50,000
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Medical Insurance Premium: ₹18,000
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Investment under Section 80C: ₹1,50,000
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Term Deposit Interest: ₹85,000
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Short Term Capital Gains: ₹22,000
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Long Term Capital Gains: ₹1,35,000
Under the new tax regime, most exemptions and deductions (like 80C and interest on housing loans) are not applicable, but capital gains are taxed separately.
Step-by-Step Filing of ITR 4 AY 2025-26 under New Tax Regime
Step 1: Log in to the Income Tax Portal
Visit https://www.incometax.gov.in. Log in using your PAN credentials. Select “File Income Tax Return” and choose:
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Assessment Year: 2025-26
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ITR Form: ITR 4
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Filing Type: Original/Revision
Step 2: Choose the Appropriate Filing Mode
Select Online mode for convenience. You can also pre-fill data using your PAN and previous records.
Step 3: Choose Tax Regime
Opt for the New Tax Regime (Section 115BAC). Keep in mind, under this regime:
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80C and housing loan interest are NOT allowed
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Capital gains are taxed separately at applicable rates
Step 4: Declare Business Income under Presumptive Taxation
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Go to the "Income from Business and Profession" section
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Select Presumptive Income under Section 44AD
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Enter total gross receipts: ₹35,80,000
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Declare presumptive income at 8% for cash (₹5,80,000) and 6% for digital (₹30,00,000)
Total Presumptive Income = ₹4,56,000 (cash) + ₹1,80,000 (digital) = ₹6,36,000
Step 5: Enter Other Sources of Income
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Rental Income: ₹1,20,000
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Interest from Term Deposit: ₹85,000
Step 6: Declare Capital Gains
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Short-Term Capital Gains: ₹22,000 (taxed @15%)
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Long-Term Capital Gains: ₹1,35,000 (₹1,00,000 exempt, ₹35,000 taxed @10%)
Step 7: Deductions under New Tax Regime
Only the following deductions are allowed:
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Employer's NPS Contribution (if applicable)
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Transport allowance for specially-abled
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Deduction for Agniveers Corpus Fund
Hence, Section 80C and Medical Insurance Premium are not deductible.
Step 8: Verify Total Tax Liability
The portal auto-calculates tax based on new slab rates. Verify:
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Business Income Taxed at Slab
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Capital Gains taxed separately
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No deductions applied on 80C/80D
Step 9: Validate and Submit
Review the return. Use e-verification via Aadhaar OTP or bank account. Once submitted, download the ITR-V for your records.
Key Expert Insight
“ITR 4 under the new tax regime simplifies compliance for small businesses using presumptive taxation, but limits deductions,” says Mr. Rajeev Gupta, Chartered Accountant. “Capital gains remain outside the presumptive net and must be reported distinctly.”
Summary Checklist
✔ Log in and choose ITR 4
✔ Opt for New Regime (115BAC)
✔ Declare presumptive business income
✔ Add rental and interest income
✔ Report capital gains separately
✔ Skip 80C and home loan deductions
✔ Verify, e-verify, and submit
Disclaimer: This post is for informational
purposes only. Please refer to our full disclaimer for more details.
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