What is the meaning of presumptive taxation scheme?

According to Section 44AA of the Income-tax Act, 1961, a person engaged in business is required to maintain regular books of account in certain specified cases. To provide relief to small taxpayers from such hassles, a provision for presumptive taxation under Sections 44AD, 44ADA, and 44AE.

A person opting to be assessed under the presumptive taxation scheme can declare income at a prescribed rate and obtains relief from the hassles of tedious bookkeeping.

What are the eligibility conditions for adopting the  presumptive taxation scheme?

The presumptive taxation method can be adopted by the following classes of taxpayers :

1. Resident Individual

2. Resident Hindu Undivided Family

3. Resident Partnership Firm (not Limited Liability Partnership Firm)

This scheme, therefore, cannot be adopted by a non-resident and by any person other than an individual, a HUF or a partnership firm (not being a Limited Liability Partnership Firm).

Finally, this Scheme cannot be adopted by any person claiming deductions under section 10A/10AA/10B/10BA or under sections 80HH to 80RRB in the relevant year.

Who cannot opt to be taxed under  presumptive taxation scheme?

The following types of businesses cannot opt to be taxed under PTS:

• The business of plying, hiring or leasing goods carriages referred to in sections 44AE.

• A person who is carrying on any agency business.

• A person who is earning income in the nature of commission or brokerage

• Any business whose total turnover or gross receipts exceeds two crore rupees.

Certain professionals as referred to in section 44AA(1) are also not eligible for the PTS.

What documents would I be required to submit before e-filing?

•  Bank Statement 

•  Income tax Username & Password

•  GST Login credentials if registered