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Small taxpayers, traders, whole sellers, retailers, professionals engaged in their own trade such as doctors, lawyers, accountants, engineers, free-lancers, self-employed individuals can find the best protection from the vagaries and risks of fluctuating business revenue by opting for the Presumptive Taxation Scheme. Get in touch with a Tax Expert now!
Businesses and traders whose annual turnover does not exceed Rupees 2 crore are given special relief by the Income Tax Department’s Presumptive Taxation Scheme under Section 44AD.
Professionals (as classified by the Board of Indirect Taxes) with total receipts before taxation up to Rupees 50 lakhs can also prefer to have their income taxes returned under this scheme.
The benefit is that you will be taxed at a fixed rate for a certain period until you can get up on your feet.
Small taxpayers such as traders, wholesalers or other businesses, professionals such as doctors, lawyers, engineers, architects, accountants, technical consultants, IT professionals, Interior Designers, Company Secretaries or artists can opt to be taxed in this manner.
According to Section 44AA of the Income-tax Act, 1961, a person engaged in business is required to maintain regular books of account in certain specified cases. To provide relief to small taxpayers from such hassles, a provision for presumptive taxation under Sections 44AD, 44ADA, and 44AE.
A person opting to be assessed under the presumptive taxation scheme can declare income at a prescribed rate and obtains relief from the hassles of tedious bookkeeping.
The presumptive taxation method can be adopted by the following classes of taxpayers :
This scheme, therefore, cannot be adopted by a non-resident and by any person other than an individual, a HUF or a partnership firm (not being a Limited Liability Partnership Firm).
Finally, this Scheme cannot be adopted by any person claiming deductions under section 10A/10AA/10B/10BA or under sections 80HH to 80RRB in the relevant year.
The following types of businesses cannot opt to be taxed under PTS:
Certain professionals as referred to in section 44AA(1) are also not eligible for the PTS.
Apart from the PAN number of the commercial entity, you will be advised of the documents you would be required to send when you receive a phone call from our advisor and/or expert.
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