Presumptive Taxation Scheme for Business: Income Tax Bill 2025

Section 58: Special provision for computing profits and gains of business profession on presumptive basis in case of certain residents

Specified business:

Any business other than Business of plying, hiring or leasing goods carriage

Eligible assessee:

Resident individual, HUF, or a firm other than LLP

Restrictions:

• Assessee cannot claim deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings
• Assessee cannot claim deduction under Chapter VIII-C for the relevant tax year
• Assessee does not carry on specified profession
• Assessee does not earn any income in the nature of commission or brokerage
• Assessee does not carry on any agency business

Total turnover or gross receipts of business during tax year

(a) Does not exceed Rs. 2,00,00,000; or

(b) Does not exceed Rs. 3,00,00,000, where the amount or aggregate of amounts received, in cash, does not exceed 5% of the total turnover or gross receipts.

Manner of computation

(A) (i) 6% of total turnover or gross receipts realised in specified banking or online mode; and

(ii) 8% of total turnover or gross receipts realised in any mode other than specified banking or online mode; or” (B) profit claimed to have been actually earned

Whichever is higher

Note: Any loss, allowance or deduction allowable under the provisions of this Act, shall not be allowed

What if Lower Profits Earned?

In case total income exceeds the maximum amount which is not chargeable to tax

• Maintain such books of account
• Get the accounts audited and furnish a report of such audit

Five Year Block condition

Eligible assessee opting for Presumptive Taxation Scheme is required to declare profits as per the scheme for next 5 tax years.

Else, where total income exceeds the maximum amount which is not chargeable to tax:

• Maintain such books of account
• Get the accounts audited and furnish a report of such audit