Calculation Under Section 44AE under Presumptive Taxation
Calculation Under Section 44AE under Presumptive Taxation
Section 44AE of Income Tax Act provides the Presumptive Scheme for the business of plying, hiring or leasing of goods carriages. The person should not own more than the 10 goods carriage vehicle in the previous year. The calculation for such income is also not easy to be done. Because if the assessing officer does not satisfied with the calculation it may still lead to the litigation.
So, be careful and understand the Act properly. Let’s, discuss the calculation for such business with the help of some examples.
Example 1:
The A ltd. has 15 goods carriage vehicles. Is he eligible to file the return under section 44AE under Presumptive taxation scheme?
Answer:
No, A ltd. can not file the return under section 44AE under presumptive taxation scheme.
Example 2:
X ltd. has 8 goods carriage vehicles weighing 11500 Kg. each. Calculate the taxable income for X ltd.
Answer:
| Particular | Amount |
| Income per Vehicle per month | 7,500 |
| No. of Vehicles | 8 |
| Income per Month | 60,000 |
| No. of Months | 12 |
| Taxable Income for X ltd. | 7,20,000 |
The gross weight of the vehicle does not cross the prescribed limit. So, the income will be calculated on the basis of 7,500/vehicle per month.
Example 3:
ABC Ltd. is a Goods Carriage company, which has 8 Vehicles. The weight of the vehicle is as follows:
- 5 Vehicle = 2000 kg(Vehicle Weight) + 11000 kg(Capacity)
- 3 Vehicle = 1500 kg(Vehicle Weight) + 8500 kg(Capacity)
Calculate the Income of ABC Ltd.
Answer:
There are two kinds of the vehicle in this case. One is normal Goods Carriage Vehicle and another one is a Heavy Goods Carriage Vehicle. The difference between both types of the vehicles is the gross weight prescribed under the Act.
So, let us first calculate the income from the normal Goods Carriage Vehicles:
| Particular | Amount |
| Income per Vehicle per month | 7,500 |
| No. of Vehicles | 3 |
| Income per Month | 22,500 |
| No. of Months | 12 |
| Taxable Income for X ltd. | 2,70,000 |
Now, let us calculate the income from Heavy Goods Carriage Vehicles:
| Particular | Amount |
| Income per Ton | 1,000 |
| Weight (In Tons) per vehicle | 13 |
| Income per Vehicle | 13,000 |
| No. of Vehicle | 5 |
| Income in the Month | 65,000 |
| No. of Months | 12 |
| Income in the Year | 7,80,000 |
So, be careful while calculating the income under the Presumptive Taxation Scheme and file the Return Properly.
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Neeraj Kumar Rohila
Learn what you can, nothing is useless.
New Delhi, India
A Learner, who wants to learn from the experience.
