Which ITR Form Should I File? ITR-3 vs ITR-4 for Sellers
Answer 6 questions to find out whether you must file ITR-3 or can use the simpler ITR-4 (presumptive) form. Free, instant result for sellers.
Answer 6 questions about your turnover, investments, and income sources. We'll tell you which ITR form you're required to file for FY 2025-26 — before the July 31 deadline.
Spotlight
ITR-3 vs ITR-4 — What's Actually Different
| ITR-4 (Sugam) | ITR-3 | |
|---|---|---|
| Who it's for | Presumptive income under Sec 44AD/44ADA/44AE | Business/professional income under regular provisions |
| Turnover limit | Up to ₹2 crore (₹3 crore with 95%+ digital receipts) | No upper limit |
| Books of account | Not required | Required (or summary P&L + balance sheet if turnover is below audit limits) |
| Profit declared | Fixed at 6% (digital) or 8% (cash) of turnover minimum | Actual profit as per books |
| Capital gains | Cannot be reported (must use ITR-3/ITR-2 instead) | Can be reported |
| Company directorship / unlisted shares | Not allowed | Allowed |
| F&O / intraday trading income | Not allowed | Allowed |
| House properties | Only one | More than one allowed |
| Filing complexity | Low — a handful of numbers | Higher — full profit & loss statement |
ITR-3 vs ITR-4 — What's Actually Different
See the comparison above for how ITR-4 and ITR-3 differ across turnover limits, books of account, and eligible income types.
Why This Choice Matters More Than It Seems
Most Amazon, Flipkart, and Meesho sellers default to ITR-4 because it's simpler — and for the majority, that's correct. But three mistakes happen every filing season:
- Filing ITR-4 after crossing the turnover limit. The Income Tax Department's systems cross-check your GST returns and Form 26AS/AIS turnover against the ITR you file. A mismatch triggers a defective return notice under Section 139(9), and you'll have to refile.
- Filing ITR-4 while trading F&O on the side. F&O is treated as non-speculative business income and cannot be clubbed into a presumptive return — you need ITR-3 regardless of your e-commerce turnover.
- Sticking with ITR-4 after opting out once. Section 44AD has a lock-in rule: if you opt out of presumptive taxation in any year, you're barred from re-entering it for the next 5 assessment years and must file ITR-3 with full books during that period.
What to Do Next
Whichever form applies to you, the process for claiming TCS and TDS credits, reporting marketplace payouts correctly, and choosing between the old and new tax regime is the same. Use the income tax slabs reference to check your applicable rates, and the Old vs New Tax Regime quiz to decide your regime before you start filling in numbers — the regime choice is locked in once you file.
If your situation involves capital gains, F&O, or multiple income sources, it's worth having a CA review your return before submission rather than risk a defective-return notice this close to the July 31 deadline.