PRESUMPTIVE INCOME UNDER SECTION 44AD, 44AE, 44ADA

Hi, viewers in this article we will discuss about PRESUMPTIVE INCOME. For Small business, Transport Vehicle owners and Professional Govt. is offered Presumptive Income scheme in which no tax audit require to submit Income Tax Return.

What is Presumptive Income- 

Presumptive Income means Income is calculated Under the assumption basis that you have to declare a certain percentage of your turnover as your Net Income, in this basis Tax Audit and Maintenance of Books will not required like section 44A.

There are three Section  In Which Presumptive Income is Calculated -

1.     Section 44AD

2.     Section 44AE

3.     Section 44ADA

1.Section 44AD:-

If your gross turnover is less then 50 lakhs and ready to declare Net Income 6% of turn over is case banking receipt and 8% of turnover in cash of cash or non-banking receipt then you can submit Income Tax Return Under Section 44AD.

Condition Of Section 44AD-

• Maximum Turnover should not exceed 2 core limit.
• Net profile not less then 8% for cash turnover and not less than 6% in case of digital or banking turnover.
• If the taxpayer has more then one business then total turn not exceed the maximum limit.
• Tax payers can avail deduction under chapter VIA.
• Any individual running with any kind of business can avail of this section.
• He can file ITR-4 Sugam. 

2.Section 44AE:-

This section is applicable for those who own goods or carriage vehicles not more than monthly income Rs. 37,500/-if the conditioned fulfilled taxpayer should require any tax audit of books of account U/S 44AB and 44AA.

Condition of Section 44AE-

• Should Not own more than 10 Vehicles.
• The income per vehicle should not Exceed RS.7,500/- per month.
• Tax Payer can Avail deduction under chapter VIA.
• All Vehicles should be Commercial. 

3.Section 44ADA:-

This Section applied for Professionals like ENGINEERING, LEGAL, MEDICAL, ARCHITECTURAL, ACCOUNTANCY, TECHNICAL CONSULTANCY, INTERIOR DECORATION, ANY OTHER PROFESSION AS NOTIFIED BY THE BOARD. If the conditioned fulfill by tax payer's then the tax audit and maintenance of books not required for them and can avail ITR 4 Sugam for filing tax return.

Condition of Section 44ADA-

• Professional like CHATTERED ACCOUNTANT, SOFTWARE ENGINEER, DOCTOR, ENGINEERS, ARCHITECT, INTERIOR DECORATORS, etc. The person those who are self-employed but not working under any employer or organization.
• Gross Receipt Should not exceed more than 50 lakhs per annum.
• Income of  the person should be assumed a minimum 50% of gross receipt
• Tax Payer can Avail deduction under chapter VIA.  

Note:- Insurance Agent or Commission Agent can not file tax returns under any presumptive income basis.