SECTION 44AD SPECIAL PROVISION FOR COMPUTING PROFITS AND GAINS OF BUSINESS ON A PRESUMPTIVE BASIS
Updated: Oct 14, 2022
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Applicability
The provisions of this section are optional for all assessees and only apply to resident Individuals, HUFs, and Firms (excluding LLPs).
This clause only applies if the turnover is less than Rs. crores.
The assessee's profit and earnings from the eligible business will be presumed to be 8% of total turnover or gross revenues if they are not claimed under sections 10AA[1], 80IA to 80RRB.
Exception
Only if the qualifying assessee is not involved in any of the following companies is this provision applicable:
Activities are covered by section 44AE.
A person practising a certain profession as defined by section 44AA.
A person who makes money through commission or brokerage.
Any individual conducting agency business.
Amended clause
By the financial amendment made in 2017, if a business's revenue during the previous year or before the deadline under section 139(1) was paid by account payee check, draught, or electronic funds transfer (ECS), 6% of those revenues will be declared as profit, or the assessee may declare more profit.
[1] Indian Kanoon (Section 10 of Income Tax Act)- https://indiankanoon.org/doc/595606/