iii. Presumptive Taxation Scheme
If I adopt the presumptive taxation scheme of section 44AE, then am I liable to pay advance tax in respect of income from business covered under section 44AE?
Yes. In case of PTS for transporters, advance tax needs to be paid in all quarters and not only in last quarter unlike the PTS for section 44AD and 44ADA.
For a person adopting the presumptive taxation scheme of section 44AE, is there a need to maintain books of account as per section 44AA?
No. Any person adopting PTS of 44AE does not need to maintain books of accounts as per 44AA.
Could a person owning more than 10 goods vehicles adopt the presumptive taxation scheme of section 44AE?
According to PTS scheme of section 44AE, the income will be computed at the rate of Rs. 7,500 per vehicle per month. In this case the taxpayer is eligible for further deductions from the presumptive income declaration. As per section 44AE, no ...
Who is eligible to take advantage of the PTS of section 44AE and which business is eligible for the PTS under section 44AE?
Everyone i.e. Individual, Firm, HUF, Company, etc. can take advantage of the presumptive taxation scheme of section 44AE and all business are also eligible for it.
What is presumptive taxation scheme (PTS) for transporters?
The PTS is available for persons who are engaged in the business of transport (plying and hiring) through goods vehicles and own 10 or lesser number of vehicles. In such cases, the taxable income shall be computed as follows: In case of Heavy Goods ...
What will happen if I opt for presumptive taxation scheme (PTS) for profession but I declare the profit at lesser percentage of turnover/receipts than that mandated as per the PTS (i.e. I declare profits at a rate lesser than 50%)?
You cannot opt for PTS if you are declaring profits at a rate lesser than the mandated rate. In such case, you need to maintain the books of account and get them audited from a Chartered Accountant and based on the report of such audit, you have to ...
What will happen if I don’t pay advance tax?
If you fail to pay the advance tax by 15th March of the previous year, you will be liable to pay interest as per section 234C.
If I adopt the presumptive taxation scheme of section 44AD, then am I liable to pay advance tax on income from business covered under section 44AD?
You are not required to pay advance tax in all the four quarters of a financial year but you are required to pay advance tax only once i.e. on or before 15th March of a financial year. However, any amount paid by way of advance tax on or before 31st ...
After adopting PTS and computing my taxable income at 50% of my receipts, can I claim any other deductions from such taxable income?
No. The income computed at the given rate shall be the final taxable income on which you have to compute tax and no further deductions are allowed from this income.
Being a professional, I adopt the PTS. How should I compute my taxable business income?
If you adopt PTS as a professional, then your taxable income shall be 50% of your turnover or receipts. For example, if your receipts or your annual turnover is Rs.48 lacs, then you must declare taxable profits at 50% of the turnover i.e Rs.24 lacs.
Who can take advantage of the presumptive taxation scheme of section 44ADA?
Any person resident in India, engaged in the following professionsand having a turnover of Rs.50 lacs or less can take advantage of PTS. Legal Medical Engineering or architectural Accountancy Technical consultancy Interior decoration Any other ...
If I adopt the PTS for a small business initially, but then opt out of PTS in one of the subsequent five years, what will be the consequences?
Once you opt for PTS then you have to continue with it for the next five years if your turnover is less than 2 crore rupees. Even after having a turnover of less than 2 crores in any of the subsequent five years if you declare profits lesser than 8% ...
Can I opt for presumptive taxation scheme (PTS) for small business and declare the profit at lesser percentage of turnover/receipts than that mandated as per the PTS (i.e. I declare profits at a rate lesser than 8%)?
You cannot opt for PTS if you are declaring profits at a rate lesserthan the mandated rate. In this case, you need to maintain the books of account and get them audited from a Chartered Accountant and based on the audit report you have to declare ...
If I adopt the presumptive taxation scheme of section 44AD, then am I required to maintain books of account as per section 44AA?
No. There is no requirement to maintain books of account as per section 44AA in this case.
Can I claim any further deductions from the income computed at 6% or 8% on a presumptive basis?
No. The income computed at the given rates shall be the final taxable income on which you have to compute tax and no further deductions are allowed from this income.
How to calculate taxable business income in case of a person adopting the presumptive taxation scheme of section 44AD?
In case of a person adopting the PTS, the taxable business income shallbe 8% or more of the turnover or gross receipts of the eligible business for theyear. This rate shall be 6% for that portion of the turnover which is receivedthrough banking ...
If I don’t opt for presumptive taxation scheme, how do I compute my taxable business income?
For the purpose of computing taxable business income in the above manner, the you have to maintain books of account of the business, and income will be computed by deducting expenses from receipts as follows: Particulars Amount Turnover or gross ...
Can a person having a total turnover for the year more than Rs. 2,00,00,000 adopt the presumptive taxation scheme of section 44AD?
No, any person having a total turnover more than Rs. 2,00,00,000 for the year cannot adopt the presumptive taxation scheme of section 44AD.
Can a person engaged in a profession adopt the presumptive taxation scheme of section 44AD?
No. He has to adopt the presumptive taxation scheme as given in section 44ADA and not in section 44AD.
Can an insurance agent adopt the presumptive taxation scheme of section 44AD?
A person who is earning income in the nature of commission or brokerage cannot adopt the presumptive taxation scheme of section 44AD. Insurance agents earn income by way of commission. Hence, as per section 44AD, they cannot adopt the presumptive ...
Which businesses cannot avail presumptive taxation scheme?
The following businesses are not eligible for presumptive taxation scheme: A person carrying out any agency business A person earning income of commission or brokerage Any business having total turnover or gross receipts exceeding ₹2 crore Any ...
Who can avail of the presumptive taxation scheme of section 44AD?
Any ofthe following is eligible for PTS Resident Individual. Resident Hindu Undivided Family. Resident Partnership Firm (excluding LLP Firms). A person who has “NOT” made any claim towards deductions under section10A/10AA/10B/ 10BA or under sections ...
What is the legal framework of presumptive taxation scheme?
The presumptive taxation scheme is prescribed in following sections of Income tax Act. Section Eligible business covered 44AD Small business having a turnover of less than Rs.2 crores 44ADA Taxpayers engaged in any profession 44AE Small transporters ...
What is the meaning of presumptive taxation scheme?
For small taxpayers generating business income or professional income, the Income Tax Law provides a scheme whereby you don’t need to keep and maintain books of account, if you declare business profits or professional profits above certain fixed ...