Which ITR for Presumptive Business and Capital Gains?
ITR-4 may be used only when the presumptive business/professional income and capital gains both fit its eligibility conditions. Otherwise, ITR-3 generally applies.
Quick Answer
Capital gain is generally determined by comparing the transfer consideration with the applicable cost and eligible expenses, then applying the holding-period classification and rate rules for the relevant asset and tax year. Special provisions can change the result for particular assets. The relevant asset or transaction named in this question should be identified before applying the capital-gains computation and rate rules. This page specifically addresses “Which ITR for Presumptive Business and Capital Gains”.
Allowed capital-gain situation
An otherwise eligible ITR-4 taxpayer may have long-term capital gain under section 112A within ₹1.25 lakh, subject to the other conditions.
When ITR-3 is needed
If there is short-term capital gain or section 112A long-term capital gain above the ITR-4 limit, ITR-3 generally becomes the relevant form for a taxpayer with business or professional income.
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