Profits-gains business on presumptive basis-Section 44AE

  1. the scheme is applicable to an assessee who owns not more than 10 goods carriages at any time during the previous year and who engeged in the business of plying, hiring,or leasing of such goods carriages;
  2. the profits and gains of each goods carriages owned by the above assessee in the previous year shall be estimated as under :
  • For heavy goods vehicle – Rs. 5,000 for every month or part of a month during which the heavy vehicle is owned by the assessee in the previous year ;
  • For goods carriage other than heavy goods vehicle – Rs. 4,500 for every month or a part of a month during which the goods carriages is owned by the assessee in the previous year.

The assessee may choose not to opt for the scheme and may declare an income lower than the income as specified above. However in such a case, the assessee shall have to keep and maintain books of accounts and get his accounts audited by a chartered accountant under section 44AB.

Other Relevant Points regarding Section 44AE
1. In case an assessee is carrying on more than 1 business, the total turnover of all the businesses should be taken into account.
2. However, if the assessee is carrying on business as well as profession, Section 44AE can be applied on the income earned from business. Computation of Income earned from Profession would be computed as per the normal provisions of the Income Tax Act
3. An assessee declaring his income as per presumptive taxation under section 44AE can also claim tax benefit of deductions under chapter VI A
In case an assessee is applying presumptive taxation under section 44AD, he should file his income tax return

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