What is the manner of computation of taxable business income in case of a person adopting the presumptive taxation scheme of section 44AD?

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PRASHANT 3 weeks 1 Answer 11 views 0

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  1. In case of a person adopting the provisions of section 44AD, income will be computed on presumptive basis, i.e., @ 8% of the turnover or gross receipts of the eligible business for the year.

    Income shall be calculated at rate of 6% in respect of total turnover or gross receipts which is received by an account payee cheque or draft or use of electronic clearing system.

    In other words, in case of a person adopting the provisions of section 44AD​, income will not be computed in normal manner as discussed in previous FAQ (i.e., Turnover less Expense) but will be computed @ 8%/6% of the turnover.

    Income at higher rate, i.e., higher than 8% can be declared if the actual income is higher than 8%.

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