What is Presumptive Taxation Scheme?

Presumptive taxation scheme was introduced by the Income Tax Act, 1961 to give relief to small taxpayers from the tedious job of maintaining books of account and from getting the accounts audited.

Any individuals, HUF or partnership firms who avail presumptive taxation scheme, has to declare income at a predefined rate without going through the cumbersome task of maintaining books of accounts and audit. Three presumptive taxation schemes available to small taxpayers as per income act u/s:

• 44AD for small businesses
• 44ADA for professionals
• 44AE for businesses engaged in plying, hiring or leasing of goods carriages