ITR-3, ITR-4 & ITR-5 for Non-Audit Cases (AY 2026-27): Filing Guide for Individuals, Professionals, Partnership Firms & LLPs – 31 August Deadline

Once you know your business doesn’t need a tax audit, the hard part should be over. But ITR filing is still left. One ITR filing mistake – picking the wrong form or misreporting one line item – can put you in a spiral of income tax notices and intimations.

This ITR filing guide talks about how to choose the correct ITR form for AY 2026-27, reporting requirements for ITR-3, ITR-4 and ITR-5, business and profession pre-filing reconciliation and complete non-audit return before 31 August 2026.

Audited vs. Non-Audited Status: This article assumes you have already confirmed your non-audit status.

What is the Due Date for Filing ITR in Non-Audit Cases for AY 2026-27?

31 August 2026 is the statutory due date under Section 139(1) for filing ITR-3, ITR-4 and ITR-5 returns for non-audit taxpayers in AY 2026-27. The Finance Act, 2026 inserted a dedicated deadline of 31 August for non-audit taxpayers deriving profits and gains from a business or profession.

Primary sources: Income tax department – Return of Income, ITD – FAQ

Key Takeaways

• ITR due date: 31 August 2026 for eligible non-audit business and professional cases.
• ITR-3: For Individuals and HUFs with business or professional income who are not eligible for ITR-4.
• ITR-4: For eligible Individuals, HUFs and Firms using presumptive taxation under Sections 44AD, 44ADA or 44AE.
• ITR-5: For firms, LLPs, AOP & BOI covered by the form.
• Late filing: Filing after the due date results in interest and loss of major loss carry-forward benefits.

STATUTORY FILING TIMELINE(AY 2026-27)
↓	↓	↓	↓
31 JULY 2026	31 AUGUST 2026	31 OCTOBER 2026	30 NOVEMBER 2026
Salaried/Non-Business	Non-Audit Business/Profession	Tax Audit Cases	Transfer Pricing Cases
(ITR-1 & ITR-2)	(ITR-3, 4, 5)	(ITR-3,5,6)	(ITR-5, 6)

Which ITR Form Should You Use?

Choosing the correct Income Tax Return form depends primarily on who you are, the nature of your income and whether you have opted for presumptive taxation.

For non-audit cases, tThe table below answers your question: Should I file ITR-3, ITR-4 or ITR-5?

Taxpayer	Nature of Income	Applicable ITR	Due Date (AY 2026-27)
Individual/HUF	Regular Business/Profession (Maintaining regular books of account & non audit)	ITR-3	31 August 2026
Individual/HUF	Presumptive business or professional income under Sec. 44AD, 44ADA or 44AE	ITR-4(Sugam)	31 August 2026
Partnership Firm(not LLP)	Presumptive Business Income (Sec. 44AD, 44ADA or 44AE)	ITR-4(Sugam)	31 August 2026
Partnership Firm(not LLP)	Business income (non-audit)	ITR-5	31 August 2026
LLP (not liable to audit)	Business or professional income(Presumptive/Regular)	ITR-5	31 August 2026

ITR-3 vs ITR-4: What Is the Difference?

The simplest way to understand the difference is:

ITR-4 (Sugam): It is designed for eligible Resident taxpayers like Individuals, HUFs and Partnership Firms (excluding LLPs) whose total income does not exceed ₹ 50 Lakhs and having business or professional income under the presumptive tax schemes of Section 44AD, 44ADA or 44AE. For AY 2026-27, ITR-4 can also accommodate only Section 112A LTCG up to ₹ 1.25 lakh.

ITR-3: A form required for individuals and HUFs earning income under the head Profits and Gains of Business or Profession (PGBP) who are not eligible for ITR-4 (Sugam).

6 Conditions that mandate choosing ITR-3 over ITR-4:

1. Gross turnover/receipts exceed presumptive limits (₹ 3 Crores for 44AD or ₹ 75 Lakhs for 44ADA where cash receipts do not exceed 5% of total receipts).
2. Holding directorships in a company or unlisted equity shares at any time during the financial year.
3. Holding foreign assets, holding signing authority in foreign accounts or earning foreign-sourced income (Schedule FA).
4. Having short-term capital gains or Section 112A LTCG exceeding ₹ 1.25 lakh.
5. Earning income from Virtual Digital Assets under Schedule VDA.
6. Carrying forward or brought forward losses under any head of income.

Eligibility, Turnover & Filing under 44AD and 44ADA: All about Presumptive Taxation Scheme

ITR-3 vs ITR-4 vs ITR-5: Comparison Table

ITR Form	Eligibility	Income Type	Due Date for AY 2026-27
ITR-3	Individuals and HUFs who have income from PGBP and are not eligible to file ITR-1, ITR-2 or ITR-4	Salary/Pension, House Property, Business or Profession, Capital Gains or other sources	31 August 2026
ITR-4 (Sugam)	Resident Individuals (not RNOR), HUFs and Partnership Firms (not LLPs) eligible under presumptive taxation	Presumptive business or professional income under Sections 44AD, 44ADA or 44AE	31 August 2026
ITR-5	Partnership Firms, LLPs, AOP & BOI	Business or professional income, capital gains, house property & other sources	31 August 2026

The 44AD Five-Year Rule: Not to be missed

The five-assessment-year restriction is specifically related with Section 44AD(4) of the Income tax Act.

Where an eligible assessee has declared profits under Section 44AD and subsequently opts out of presumptive taxation scheme of Section 44AD and declares profits normally, then the taxpayer cannot claim the presumptive benefit for the next five assessment years.

This also has implications for books and audit requirements in cases covered by Section 44AD(5).

But there is no “five-year lock-in” for 44ADA.

Section 44AD and Section 44ADA should be analysed separately. Professionals (like doctors, lawyers or consultants) do not have a 5-year lock-in period.

Section 115BAC Default Tax Regime & Form 10-IEA Rules (AY 2026-27)

The New Tax Regime under Section 115BAC is the default regime for AY 2026-27. 

Form 10-IEA Requirement: 

Taxpayers having business or professional income who want to opt out of the default New Tax Regime must furnish Form 10-IEA on or before the due date under Section 139(1) (31 August 2026 for non-audit cases). 

Unlike taxpayers without business or professional income, they cannot freely switch between the Old and New Tax Regime every year. After opting for the Old Tax Regime, they have a one-time option in a subsequent assessment year to withdraw that option and re-enter the New Tax Regime. Once they re-enter the New Tax Regime, they cannot opt for the Old Tax Regime again.

ITR Filing for Freelancers and Consultants & Small Business Owners

Reporting Guidelines: Form by Form

ITR-3 Practical Reporting

Some of the important reporting areas file ITR with multiple income sources are:

1. Schedule BP (Business and Profession Income)

Regular Books: Report the accounting profit or loss, cost of goods sold, administrative overheads, deductions required to arrive at taxable business/professional income. You would need detailed financial statement figures to report in Schedule BP.

No Regular Books Maintained (Exempt under Section 44AA): You would need to enter only a few financial statement figures like Gross Receipts & Gross Profit, etc.

Disallowance 

Section 40(a)(ia): Add back 30% of payments made to residents where TDS was not deducted or deposited by the due date of filing the return.

Section 40A(3): 100% of expenditure exceeding ₹ 10,000 paid other than prescribed modes is disallowed, subject to some exceptions. 

2. Schedule BS (Balance Sheet)

Important fields in the form are:

1. Proprietor’s Capital
2. Total Debtors and Creditors
3. Inventories/Stock-in-Trade
4. Cash and Bank Balances

Capital account balances must reconcile mathematically. 

Capital Reconciliation Formula:

Closing Capital = Opening Capital + Net Profit – Drawings

3. Schedule CG (Capital Gains)

You have to report capital gain by disclosing full value of consideration, asset acquisition costs, improvement costs and indexed acquisition costs.

4. Schedule VDA (Virtual Digital Assets/Crypto)

Report every transfer of Virtual Digital Assets with Date of Acquisition and Date of Transfer, Cost of Acquisition, Consideration Received. Losses from VDAs cannot be set off against any other income or carried forward. Know TAXATION OF VIRTUAL DIGITAL ASSETS.

5. Schedule FA (Foreign Assets)

It is mandatory for resident taxpayers (ROR). Report foreign bank accounts, depository accounts, equity/custodial accounts, immovable property or signing authority, etc. held outside India.

Failure to disclose foreign assets in Schedule FA attracts penalties under the Black Money Act, 2015 (a flat penalty of ₹ 10 Lakhs). However, if the total aggregate value of foreign assets (other than immovable property) does not exceed ₹ 20 Lakhs in case of non-reporting, Schedule FA will not attract the ₹ 10 Lakh penalty.

ITR-4 (Sugam) Practical Reporting

1. Schedule BP (Presumptive Income Details)

Section 44AD (Small Businesses)

You have to report gross receipts into two buckets:

1. Cash Receipts: Taxed at a minimum deemed profit rate of 8%.
2. Bank Receipts: Taxed at a minimum deemed profit rate of 6% (includes UPI, NEFT, RTGS, Credit/Debit cards and Account Payee Cheques).

The turnover limit is ₹ 3 Crores, provided total cash receipts do not exceed 5% of aggregate turnover.

Section 44ADA (Specified Professionals)

Disclose gross professional fees and minimum deemed taxable profit at 50%.

The gross receipts limit is ₹ 75 Lakhs, provided cash collections do not exceed 5% of total professional receipts.

Section 44AE (Goods Carriage Transport Operators)

Please report vehicle registration details, tonnage capacity and ownership duration.

2. Mandatory Financial Particulars (Balance Information)

Though full financial statements are not required, ITR-4 filers must report these four balance sheet figures as of 31 March 2026:

1. Total Sundry Debtors
2. Total Sundry Creditors
3. Total Stock-in-Trade
4. Cash in Hand Balance

3. Schedule GST

You are required to report turnover or gross receipts declared in the GST returns.

ITR-5 Practical Reporting

In ITR-5, a partnership firm or LLP should review areas:

1. Schedule BP

Report net profit or loss as per the Profit & Loss Account, expenses disallowable under Income tax law, depreciation and the taxable profit or business loss.

Deductions for partner remuneration and interest paid to partners under Schedule BP, strictly governed by the statutory income tax limits under Section 40(b).

2. Schedule IF (Information Regarding Partnership Firms in Which the Assessee Is a Partner)

This schedule is specific and relevant where the ITR-5 filer (individuals and entities) is itself a partner in one or more other firms. This section requires details such as:

1. Name of the partnership firm
2. PAN of the firm
3. Whether that firm is liable to tax audit
4. Whether Section 92E applies to that firm
5. Percentage share in the firm’s profit
6. Amount of share in profit
7. Capital balance in that firm as at 31 March

3. Section 40(b): Partner Interest & Remuneration

Partner interest and remuneration are deductible only if authorised by the partnership deed/LLP agreement and within Section 40(b) limits.

1. Interest on Partners’ Capital: It is deductible up to 12% interest per annum. Excess is disallowed and added back.
2. Working Partner Remuneration: 

• On the first ₹ 6,00,000 of Book Profit or loss: ₹ 3,00,000 or 90% of book profit, whichever is higher.
• On the balance of Book Profit: 60% of book profit.

4. LLP Statutory Audit vs. Tax Audit under Section 44AB

LLP Act Audit (Section 34(4) of the LLP Act): 

An LLP is required to have its accounts audited under the Limited Liability Partnership Act, 2008 if its turnover exceeds ₹ 40 Lakhs or its partner capital contributions exceed ₹ 25 Lakhs.

Tax Audit (Section 44AB of the Income-tax Act, 1961):

Tax audit applies to LLP under Section 44AB of the Income tax law if turnover thresholds are crossed (like for regular business – ₹ 1 Crore or up to ₹ 10 Crores if cash transactions do not exceed 5%. For profession – gross receipts exceed ₹ 50 lakh in the financial year).

An LLP that is exempt from Tax Audit but required to get statutory audit under the LLP Act, must file its ITR-5 by the extended deadline of 31 October 2026 (not the standard 31 August 2026).

Pre-Filing Reconciliation & Checklist for Non-audit Business & Professions

1. Reconcile TDS Credits

Match the TDS shown in Form 26AS/AIS/TIS with your records and ITR. Check credits under sections such as 194C (contractors), 194J (professional/technical fees), 194H (commission) and 194O (e-commerce payments).

2. Reconcile Income & Receipts

Match your books and bank statements with the income reported in the ITR. Check that all business/professional receipts, interest, commission and other income have been properly considered.

3. Reconcile Turnover

Make sure the turnover reported in ITR-3, ITR-4 or ITR-5 is consistent with GST returns (GSTR-1 and GSTR-3B), wherever business is GST registered. Investigate and explain any material differences to reduce risk of income reporting mismatches.

Frequently Asked Questions (FAQs)

Q1. I run a small business or profession. Should I file ITR-3 or ITR-4?

File ITR-4 (Sugam) if you meet the eligibility criteria for presumptive taxation under Section 44AD, 44ADA or 44AE, your gross receipts remain within income tax law limits (up to ₹ 3 Crores for business, ₹ 75 Lakhs for profession in case of at least 95% non-cash receipts) and your total income is under ₹ 50 Lakhs.

File ITR-3 where you are not eligible for ITR-4. File ITR-3 if you maintain regular books of account, claim actual profit lower than the minimum as per presumptive scheme, hold foreign assets, earn capital gains, serve as a company director, hold unlisted shares or need to carry forward losses.

Q2. Can a partnership firm or LLP file ITR-5 or is ITR-4 permitted?

Non-audit Partnership Firms can file ITR-4 if they qualify for and opt into presumptive taxation under Section 44AD, 44ADA & 44AE. Otherwise, partnership firms must file ITR-5.

LLPs are prohibited from filing ITR-4 and must file ITR-5 for any amount of income, regardless of whether they choose regular or presumptive bookkeeping.

Q3: How does opting out of Section 44AD affect future form selection?

If an assessee has declared profits under Section 44AD and during the next five-year period does not declare profits in accordance with Section 44AD(1), Section 44AD(4) applies. This clause says that the assessee cannot claim Section 44AD for the five assessment years from the year of opting out of presumptive scheme.

During this period, if the assessee’s total income exceeds the basic exemption limit, they have to comply with maintenance of books under Section 44AA(2) and tax audit under Section 44AB if liable.

Regarding ITR form selection, ITR-4 cannot be used by an individual or HUF carrying on business in such cases. ITR-3 would be appropriate.

Q4. What is the last date to file ITR for non-audit individuals, professionals, firms and LLPs for FY 2025-26?

The last date to file ITR for non-audit individuals, professionals, firms and LLPs for FY 2025-26 is 31 August 2026.

Q5. What happens if I miss the 31 August deadline for my non-audit business return?

If you miss the deadline, you can file a Belated Return under Section 139(4) by 31 December 2026. Consequences of late ITR filing include late filing fees under Section 234F (₹ 1,000/₹ 5,000), interest under Section 234A, inability to validly opt for the Old Tax Regime  via Form 10-IEA and loss of carry forward business and capital losses rights under Section 80. 

Q6. Does Master Brains assist with end-to-end ITR preparation and filing for non-audit cases?

Yes. Master Brains provides end-to-end tax advisory, tax compliance and income tax return filing services for sole proprietors, professionals, partnership firms and LLPs. Our income tax return filing consultants manage your AIS/TIS reconciliation, tax regime optimization (Old vs New), Form 10-IEA submissions, partner remuneration calculations under Section 40(b) and submission of ITR-3, ITR-4 and ITR-5 returns.

Next Steps: What Businesses Should Do Before 31 August 2026

This is only one part of filing a return. The real work is calculating the numbers, form and tax position right before ITR submission.

File Your Return Before 31 August 2026

Master Brains’ CAs can help Iincome Ttax clients with:

• Old vs. New Tax Regime: Compare tax liability and choose the suitable regime for eligible assessees.
• Form 10-IEA: Assistance with filing Form 10-IEA for eligible taxpayers opting out of the default tax regime.
• Income and Tax Computations: Carrying out complex head wise income and tax workings.
• Presumptive Taxation: Eligibility assessment and compliance under Sections 44AD, 44ADA and 44AE.
• Section 40(b) Compliance: Partner remuneration and interest calculations for partnership firms and LLPs.
• AIS, TIS & Form 26AS Reconciliation
• ITR Form Selection & Filing: Correct form selection and filing for businesses, professionals, firms and LLPs.

Master Brains is a Delhi-based CA firm led by CA Neha Agarwal (FCA).

Don’t wait for the end-of-August. Contact NOW!

Explore Our Services: ITR Filing for Businesses, Professionals, Firms & LLPs

Direct Call: +91 85958 67402

Email ID: masterbrains.office@gmail.com

This guide will be updated if CBDT issues any further extension.