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Comparison of sections 44AD, 44ADA, and 44AE under Presumptive Taxation

Comparison of sections 44AD, 44ADA, and 44AE under Presumptive Taxation

In the income tax law, there are various methods for calculating the incomes for an assessee. It also provides the taxpayers with the option of Presumptive taxation. Which allows the taxpayer to pay the tax under presumptive income. The major section under the presumptive taxation is section 44AD, Section 44ADA, and section 44AE. These section cover business, profession, and goods carriage services respectively. 

 

Basis

Section

 44AD

44ADA

44AE

Eligible Assessee

Individual, HUF, and Partnership Firm(Except a Limited liability partnership firm).

Individual Resident Assessee. (This section cover the profession only).

Plying, Hiring, and leasing goods Carriage.

Eligible Business/Profession

Business (Not covered u/s 44AE)

And Gross Receipt more than 2 crore rupees.

Profession notified u/s 44AA(1).

  • Legal
  • Medical
  • Engineering
  • Architectural profession
  • profession of accountancy
  • technical consultancy
  • interior decoration
  • any other profession as is notified by the Board in the Official Gazette.

Not own more than 10 Goods Carriage

Rate Applicable as Income/Profit

6% & 8% of Gross Receipts.

50% of Gross receipts

OR

Higher (Declared by Assessee)

 7,500 per Goods carriage vehicle Owned per month

OR

1,000/ton(Capacity) per Month (If heavy Vehicle)

Deductions Disallowed

No further deduction u/s 30 to 38.

Deduction u/s 30 to 38.

u/s 30 to 38.

Valuation of Assets

Also included in the valuation and No further deduction will be given (at WDV).

No further deduction will be given for professional assets (at WDV).

Also included in the valuation and No further deduction will be given (at WDV).

Resident Status

Resident

Individual should be a Resident.

Resident

 

Note: Profession means the person who has the degree of learning. So, the individual can be covered under section 44ADA of Income Tax Act.

The date for the payment of such tax in advance is the 15th of March. The calculation will be done according to the presumptive basis. So, be alert and pay your taxes on time.

Further notified Professions:

There is some more profession which is further notified by the government. So, the following are those profession notified by the government:

  • The profession of the authorized representative
  • The profession of film artist (actor, cameraman, director, music director, art director, dance director, editor, singer, lyricist, story writer, screenplay writer, dialogue writer and dress designer) – Notification No. SO 17(E), dated 12-1-1977
  • The Profession of Company Secretary – Notification No. SO 2675, dated 25-9-1992
  • The Profession of Information Technology – Notification No. SO 385(E), dated 4-5-2001.

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Profile photo of Neeraj Rohilla Neeraj Rohilla

New Delhi, India

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