The Central Board of Direct Taxes has made bank balance reporting mandatory in ITR-4 (Sugam) for Assessment Year 2026-27 and the small businesses and professionals must disclose 31 March bank balance.
The change has been introduced through Notification No. 45/2026 dated 30 March 2026, by which the CBDT notified the Income-tax (Second Amendment) Rules, 2026. The rules come into force from 31 March 2026 and apply to returns filed for A.Y. 2026-27.
ITR-4 is generally used by resident individuals, HUFs and firms other than LLPs who declare income under presumptive taxation provisions such as Section 44AD, Section 44ADA and Section 44AE. In the newly notified ITR-4, the financial particulars of business now specifically require taxpayers to furnish details as on 31 March 2026. The form lists “Balance with banks” at E21 and the instruction clearly states that E15, E19, E20, E21 and E22 are mandatory.
This means that along with sundry creditors, inventories, sundry debtors and cash-in-hand, taxpayers filing ITR-4 will now have to report their bank balance as on 31 March 2026. The disclosure is no longer merely an optional financial detail; it is part of the mandatory financial particulars in Schedule BP.
The change is important because presumptive taxpayers are not required to maintain detailed books of account in the same manner as regular business taxpayers. However, the new disclosure enables the department to compare declared presumptive income with financial position, bank balances, cash-in-hand, GST turnover, TDS/TCS data and other reported information.
The notified ITR-4 also requires details of all bank accounts held in India at any time during the previous year, excluding dormant accounts. At least one bank account must be selected for refund credit, and where multiple accounts are selected, refund will be credited to one of the validated accounts decided by CPC after processing the return.
The compliance impact will be felt most by small traders, freelancers, professionals and transport operators who file ITR-4 under presumptive taxation. They should now reconcile bank balances as on 31 March with bank statements before filing the return. Any mismatch between reported turnover, presumptive income and closing bank balance may invite queries from the department, especially where the bank balance appears disproportionate to the income declared.
For Section 44AD taxpayers, ITR-4 continues to capture gross turnover or receipts separately for receipts through banking channels, cash receipts and other modes. The notified form also reiterates that if income is declared below the prescribed presumptive percentage, tax audit under Section 44AB and filing of another applicable ITR becomes mandatory.
For professionals under Section 44ADA, the form retains the requirement of declaring presumptive income at 50% of gross receipts or the amount claimed to have been earned, whichever is higher. The newly mandatory bank balance field will therefore operate as an additional transparency measure for professionals using the simplified return route.
TR-4 filers cannot ignore year-end bank balance disclosure from A.Y. 2026-27. Before filing, taxpayers should collect 31 March 2026 balances of all relevant business bank accounts, reconcile them with books or working records, ensure consistency with GST and TDS data, and avoid casual or estimated reporting.
Notification Details
Notification No. 45/2026
Date: 30 March 2026
