What is Presumptive Taxation?

Deductions under the Presumptive taxation are given below: 

• The taxable income from the business or any profession is computed after the deductions in respect of expenses that will be deductible under the Income Tax Act. 
• If any person chooses the presumptive taxation scheme, then the presumptive income will be computed as given rates, which is the final income, and no extra deductions are business or professional income are allowed. Claiming benefits of the presumptive taxation scheme under section 44AE, the firm can get a deduction on the interest paid and remuneration to partners, which is allowable under the Income Tax Act. 
• No separate deductions were available on account of depreciation. However, if there is any written value of any property or asset, then in such cases, depreciation is allowed under Section 32. 

Here are some of the benefits of disclosing income under presumptive taxation: 

• You are not required to carry your account books or carry income tax audits prescribed under sections 44AA and 44AB. 
• Any person who has chosen the presumptive taxation scheme has to pay taxes in advance or before 15 March of the last year. 
• Income tax returns can be filed easily and smoothly with the help of ITR-4 (Sugam)
• This helps you to ease into doing business and lowers heavy compliance burdens. 

Here is the list of persons who os eligible for the presumptive taxation: 

• Medical
• legal
• Architecture
• Accountancy
• Interior decoration
• Engineering