For small businesses and professionals, maintaining full books of accounts can be burdensome.
The Presumptive Taxation Scheme (PTS) allows eligible taxpayers to declare income at a fixed percentage of turnover — simplifying tax compliance dramatically.

This guide covers Sections 44AD, 44ADA, and 44AE, eligibility, tax rates, and filing tips for FY 2024–25.

1️⃣ Section 44AD – For Small Businesses

• Applies to resident individuals, HUFs, and firms (not LLPs).

• Eligible if turnover ≤ ₹2 crore.

• Income presumed at 8% of turnover (6% for digital receipts).

• No need to maintain detailed books or get an audit.

2️⃣ Section 44ADA – For Professionals

• Applies to lawyers, doctors, architects, accountants, consultants, etc.

• Eligible if gross receipts ≤ ₹50 lakh.

• Income presumed at 50% of gross receipts.

3️⃣ Section 44AE – For Transporters

• Applies to those owning ≤ 10 goods vehicles.

• Presumed income: ₹1,000 per ton per month (heavy vehicles).

Tax Payment & Filing

• Pay advance tax by 15th March in one installment.

• File ITR-4 (Sugam) by 31st July.

Key Benefits

✅ Simplified filing — no audit or books required.
✅ Predictable tax liability.
✅ Encourages small business formalization.

Important Conditions

• Must declare income at or above prescribed percentage.

• Once opted out, cannot re-enter for 5 years.

• Not applicable to businesses earning commission or brokerage.

Conclusion

Presumptive taxation is ideal for freelancers, shop owners, and local service providers.
It’s simple, predictable, and reduces compliance effort — while keeping you fully compliant under GST and Income Tax.

Continue reading:
→ Advance Tax Explained: Who Should Pay & How to Calculate It
→ Complete Guide to Filing Income Tax Returns (ITR)
→ Common Income Tax Filing Mistakes & How to Avoid Them