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Benefits under Presumptive Taxation Scheme

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Presumptive taxation scheme falls under section 44AD, 44ADA & 44AE as per income of taxpayers. There are many benefits for adopting presumptive taxation scheme are as under-

Introduction-
Section 44AD-
The presumptive taxation scheme provide relief to small taxpayers engaged in any business, except the following businesses-
  1. Business of plying, hiring or leasing of goods carriages referred to in section 44AE.
  2. A person who is carrying on any agency business.
  3. A person who is earning income in the nature of commission or brokerage
  4. A person carrying on profession as referred to in section 44AA (1).
Apart from above discussed businesses, the above scheme also not apply to the following businesses-
  1. An insurance agent
  2. A person whose total turnover or gross receipts for the year exceed Rs. 2,00,00,000

Section 44ADA-
The presumptive taxation scheme of section 44ADA is designed to give relief to small taxpayers engaged in specified profession. Professionals whose Total Gross Receipts do not exceed more than Rs. 50 lakh in a financial year, can claim the benefit of this scheme.

Section 44AE-
The presumptive taxation scheme of section 44AE can be adopted by a person who is engaged in the business of plying, hiring or leasing of goods carriages and who does not own more than 10 goods vehicles at any time during the year.

Benefits under Presumptive Taxation Scheme
  • No need to maintain books of Accounts- There is no need to maintain proper books of accounts if you adopt presumptive taxation scheme. The provision of section 44AA relating to maintenance of books of accounts will not apply. You dont require to keep an accountant to maintain proper books of accounts.
  • No need to audit books of Accounts- Under this scheme, there is no need to maintain books of accounts, so no requirement of audit of accounts by chartered a>ccountant. The provision of section 44AB relating to Audit of books of accounts will not apply.
  • Quarterly payment of Advance Tax- Under this scheme, payment of advance tax on quarterly basis is not required. The due date for payment of advance tax is 15th March of every financial year.
  • Filing Income Tax Return is simplified- No requirement to fill full details like balance sheet or profit & loss. You have to file only gross receipt or profit as mentioned under scheme of section 44AD, 44ADA or 44AE.
  • Cost effective- There is no need of an accountant, not to keep books of accounts, or no need to audit books of accounts. Hence it will reduce the cost or burden.
  • Time Saving- Opting this scheme can save you a lot of time as compared to other schemes. Otherwise you have to spend more time on maintaining books of accounts, their audit and filing income tax return or payment of advance tax on quarterly basis.



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