Presumptive Business Income Tax Return

Under the Presumptive Taxation Scheme of the Income Tax Act, income tax can be paid by the professional or consultant on half of the gross annual income.

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About this Plan

As per section 44ADA of the Income Tax Act under Presumptive Taxation Scheme, income tax can be paid by the freelancer, professional or consultant on half of their gross annual income however the total income should be less than Rs. 50 lakhs. This scheme has been introduced by the government for professionals. Under this scheme, return can be filed by the professionals declaring 50% of their gross receipts as income after deducting section 80 deductions. If you fall under the eligibility criteria and interested in obtaining the advantage of this scheme then our team of experts can file return on your behalf.

Services Covered

  • Expert Consultation
  • Document Collection
  • Income Tax Return Preparation
  • Income Tax Return Filing

Who should go for it?

To compute the taxable income, every business entity needs to maintain book of accounts along with profit & loss statement which need to get evaluated at the end of the financial year. Therefore government came up with Presumptive Taxation Scheme in order to reduce the compliance burden and provide relief to small assesses. Regular maintenance of books of account is not required for those who are adopting the provisions of Section 44AD. Auditing of books of accounts is also exempted under this provision. For this, ITR-4 Form is filed.

Steps Covered

  • Check Eligibility Criteria
  • Collection of necessary documents
  • Log in on the website of Income Tax Department using login credentials
  • Claim deductions
  • Filing of prescribed i.e Form ITR-4

Documents Required

  • PAN & Aadhar of the Assessee
  • Bank Statement of the Assessee
  • Information regarding TDS and advance tax payments.
  • DSC (If applicable)
Frequently asked Questions

Q1. What are the eligibility criteria for presumptive taxation scheme of Section 44AD?

The following persons are eligible for presumptive taxation scheme:

  • Resident Individual
  • Resident Partnership Firm /LLP
  • Resident Hindu Undivided Family (HUF)

Q2. What is the maximum turnover limit to become eligible for Presumptive Taxation Scheme?

The turnover limit should not be more than Rs. 2 crores in order to opt presumptive taxation scheme.

Q3. Can an insurance agent opt the presumptive taxation scheme?

No. Presumptive taxation scheme cannot be opted by such person whose income is generated through brokerage or commission. Therefore insurance agents are not allowed to opt presumptive taxation scheme as they earn commission.

Q4. What is the main benefit of presumptive taxation scheme?

Previously the benefit was limited to businesses only but now professionals are also eligible for its benefit. However this applicability is limited up to the total gross receipts of Rs 50 lakhs in a financial year.

Q5. What is the process of computing income under presumptive taxation scheme of Income Tax Act?

Under Presumptive Taxation Scheme, income is calculated at the rate of 8% of the turnover. However income will be computed at the rate of 6% in place of 8% in case gross receipts received through cheque, bank draft or an electronic clearing system (ECS) during the previous year.

Q6. Are you a freelancer and looking for assistance in filing form ITR-4?

If your answer is yes then tax experts at Enterslice can prepare and file your return in an easiest way. We have a team of experienced chartered accountants who can assist you and help in hassle free manner.

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