SECTION 44 ADA of the INCOME TAX ACT
The provisions of this section are optional for all assessees and only apply where the assessee is a Resident Individual, HUF, or Firm (excluding LLP).
When a resident assessee's total gross receipts for any profession listed under section 44AA in the preceding year did not exceed Rs 50 Lakh, then a sum equal to 50% of those total gross receipts shall be deemed to be the income of PGBP.
Professionals in the legal, medical, engineering, or architectural fields, as well as those in accounting, technical consulting, or interior design, are eligible.
What if the assessee reports a lower profit?
An assessed person may disclose income that is less than the projected income. In this situation, he will need to:
Maintain accounting records and other paperwork as required by section 44AA.
Regardless of the volume of turnover or gross receipts, have his accounts audited in accordance with section 44AB.
Rate of Tax
If the assessee meets the eligibility and applicability requirements, its income might be assumed to be at 50%. The assessee who determines its income in accordance with this section is not required to keep a book of accounts or have it audited.