The Table below specifies option available to small tax payers under Income Tax Act, to pay tax on a presumptive basis in order to save them from the requirement of “Maintenance of Books of Accounts” and “Tax Audit”. In order to get benefit under these provisions one need to fulfil all the conditions specified therein. The income to be reported in ITR should be higher of actual profit, if known and the deemed income specified in those sections.
|Section||Conditions For Applicability||Deemed Income|
|44AD||Ø Eligible assessee: Resident: Individual, HUF, Firm(other than LLP) carrying on eligible business and not claiming any deduction under section 10A, 10AA, 10B, 10BA or Chapter- VIA
Eligible Business: Every business except
- Specified profession in section 44AA(1),
- Agency business,
- Income in nature of commission or brokerage,
- Covered u/s 44AE
Total Turnover/ Gross Receipt not exceeding Rs. 2 crore8% of Total Turnover or Gross Receipts
6% of Total Turnover or Gross Receipts if consideration of turnover is received by any other mode than cash (through banking channel)44ADAØ Eligible assessee: Resident: Individual, HUF, Firm(other than LLP) carrying on eligible profession
Eligible Profession: Professions referred in Section 44AA(1) of the Act viz. Medical/Legal/Engineering/Architect/ Accountancy / Technical Consultancy/Interior Decoration/Authorized Representation/Film Artist/C.S.
Gross Receipt not exceeding Rs. 50 Lakhs50% of Gross Receipts44AE
- Eligible assessee: Every assessee carrying on eligible business
- Eligible Business: Business of plying, hiring and leasing goods carriages
- Owns not more than 10 goods carriage at any time during year
In case of heavy goods vehicle, Rs. 1000 per ton per gross vehicle weight or unladen weight.
In case of vehicle other than heavy goods vehicle, Rs. 7,500 per month per goods carriage (or a part of month)44BB
- Eligible assessee: Every non-resident assessee carrying on eligible business
- Eligible Business: Services etc. in relation to prospecting/ extraction/ production of mineral oils
10% of aggregate receipts in India or out of services rendered in India44BBB
- Eligible assessee: Foreign Company carrying on eligible business
- Eligible Business: Civil Construction in connection with approved turkey power project
10% of aggregate receipt
No further deduction under section 30 to 38 shall be allowed as it will be deemed to have been given full effect to under section 44AD, 44ADA and 44AE.
In case of Firm, salary and interest paid to its partners shall be deducted subject to section 40(b) under section 44AE.
WDV of any asset of the business shall be deemed to have been calculated as if deduction in respect of depreciation is allowed (although as stated in point two, no such deduction shall be allowed to calculate presumptive income) under section 44AD, 44ADA and 44AE.
Provisions of Advance Tax shall apply to Presumptive Business Income under section 44AD & 44ADA, however assessee may opt to pay advance tax by 15th March of Financial Year.
Where an assessee declares profit for any previous year u/s 44AD and he declares profit for any of the five consecutive succeeding years not in accordance with the provisions of this section, he shall not be eligible to claim the benefit of the provisions of this section for five subsequent years succeeding the year in which the profit has not been declared in accordance with the provisions of Section 44AD.