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Calculate Presumptive Income u/s 44AD, 44ADA and 44AE

Presumptive Income - Information

Calculation of Presumptive Income under Section 44AD
1. Amount of Gross Turnover received in cash (Deemed Profit & Gain - 8%)
2. Amount of Gross Turnover received by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account (Deemed Profit & Gain - 6%)
3. Gross Turnover or Gross Receipts
4. Minimum Presumptive Income of the business u/s 44AD

Calculation of Presumptive Income under Section 44ADA
5. Total Gross Receipts from profession
6. Minimum Presumptive Income of the business u/s 44ADA (50% of 5)

Calculation of Presumptive Income under Section 44AE
Select Assessment Year
Total number of Vehicle Owned (Max. 10 for eligibility u/s 44AE)
Number of Heavy Goods Vehicles owned (Gross vehicle weight exceeds 12 Tons)
Number of other than Heavy Goods Vehicles owned
(a) Eligible assessee means

(i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and

(ii) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading 'C. - Deductions in respect of certain incomes' in the relevant assessment year;

'eligible business' under Section 44AD means,

(i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and

(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of one crore rupees.

For the purpose of Section 44ADA -

In the case of an assessee, being a resident in India, who is carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette and whose total gross receipts do not exceed fifty lakh rupees in a previous year, a sum equal to fifty per cent of the total gross receipts of the assessee in the previous year on account of such profession or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the assessee, shall be deemed to be the profits and gains of such profession chargeable to tax under the head 'Profits and gains of business or profession'.

2. Any deduction allowable under the provisions of sections 30 to 38 shall be deemed to have been already given full effect to and no further deduction under those sections shall be allowed.

3. The written down value of any asset used for the purposes of profession shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.

4. Notwithstanding anything contained in the foregoing, an assessee who claims that his profits and gains from the profession are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (1) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.

For the purpose of Section 44AE -

Eligible Assessee is an assessee, who owns not more than ten goods carriages at any time during the previous year and who is engaged in the business of plying, hiring or leasing such goods carriages

The expression 'goods carriage' shall have the meaning assigned to it in section 2 of the Motor Vehicles Act, 1988 (59 of 1988).

An assessee, who is in possession of a goods carriage, whether taken on hire purchase or on instalments and for which the whole or part of the amount payable is still due, shall be deemed to be the owner of such goods carriage.

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Updated : Sept. 24, 2020