Presumptive Taxation Calculator
Calculate your taxable income under the presumptive scheme for small businesses and professionals. No need to maintain detailed books of accounts!
Max limit: ₹2 Cr (₹3 Cr if cash ≤ 5%)
Taxed at lower rate of 6%
Key Benefit
Under this scheme, you are not required to maintain books of accounts or get them audited, provided your income is at least the presumptive percentage.
Audit Thresholds
*Enhanced limits apply if cash receipts are ≤ 5% of total turnover/receipts.
Tax Rates
Understanding Presumptive Taxation
The Presumptive Taxation Scheme was introduced to provide relief to small taxpayers from the tedious task of maintaining books of accounts and getting them audited.
Section 44AD (For Businesses)
Applicable to individuals, HUFs, and partnership firms (excluding LLPs). It allows you to declare 8% of your turnover as income. To encourage digital transactions, the rate is reduced to 6% for turnover received through digital modes.
- Eligibility: Resident individuals, HUFs, and Partnership firms.
- Exclusions: Professionals, commission/brokerage income, and agency business.
Section 44ADA (For Professionals)
Applicable to specified professionals like Doctors, Lawyers, Engineers, Architects, Accountants, etc. It allows you to declare 50% of your gross receipts as taxable income.
- Eligibility: Resident professionals mentioned under Section 44AA(1).
- Limit: Gross receipts up to ₹50 Lakhs (₹75 Lakhs if cash ≤ 5%).
Frequently Asked Questions
Can I claim deductions like 80C under this scheme?
Yes. While business expenses (like rent, electricity, etc.) are assumed to be covered in the presumptive percentage, you can still claim deductions under Chapter VI-A (80C, 80D, etc.) from your total income.
What if my actual profit is less than 8% or 50%?
If your actual profit is lower than the presumptive rates, you must maintain books of accounts and get them audited if your total income exceeds the basic exemption limit.
Is advance tax applicable under this scheme?
Yes. Taxpayers under the presumptive scheme must pay the entire amount of advance tax in a single installment on or before 15th March of the financial year.
What is the 5-year rule for Section 44AD?
If you opt out of the presumptive scheme after opting in, you cannot opt back into the scheme for the next 5 assessment years.