What is Presumptive Taxation?

AR Posted by: Aditya Rastogi
• 08 October, 2025
6 Reply

Presumptive taxation is a scheme for small professional businesses and freelancers, which helps them to declare a percentage of their annual turnover without any need for detailed account books. The presumptive taxation should be followed for a continuous five years, and if you have existed from the presumptive taxation before 5 years, then you will not be eligible for the next 5 years of presumptive taxation.

Tags : Presumptive Taxation

  • Matriyee Saini 14 October, 2025

    What are the deductions available under the presumptive taxation scheme? 

    • S
      Savetaxs 14 October, 2025

      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. 

       

  • Shikhar Shiromani 12 October, 2025

    What are the benefits of mentioning income under the presumptive taxation? 

    • S
      Savetaxs 12 October, 2025

      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. 

       

  • Dhruv Verma 10 October, 2025

    Under the presumptive taxation scheme, business owners, freelancers, and professionals need to report their income, profits, and gains in the ITR, and the tax is calculated after deducting the eligible expenses of the business.

    • GM
      Gaurav Mishra 11 October, 2025

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

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

       

Join The Discussion

Share Your Thoughts and Connect with Others.

Releated Topics
  • TDS Deducted Twice - What Should I Do? How to Claim the Excess TDS?

    I noticed that TDS appears to have been deducted twice on the same income, and I am not sure whether this is an actual duplicate deduction or just a reporting...

    • 3 Reply
    • 64 Views
  • How Long Does a TDS Refund Take in India?

    I am an NRI and had a fairly large amount of TDS deducted from income in India during the financial year. After calculating my actual tax liability, it looks like...

    • 3 Reply
    • 59 Views
  • How Can I Apply for a Lower TDS Certificate in India?

    I am an NRI and I am planning to sell a property in India. I was told that the buyer may have to deduct a significant amount of TDS from...

    • 3 Reply
    • 62 Views
  • Why Was So Much TDS Deducted from My Property Sale?

    I’m an Indian citizen living in Dubai and became a non-resident for Indian tax purposes several years ago. I recently sold an apartment I owned in Pune, and I was...

    • 3 Reply
    • 53 Views
  • Can NRIs Get Full TDS Refunds?

    I am an NRI and had TDS deducted from my income in India during the financial year. The amount deducted is quite high compared with the tax I expect to...

    • 3 Reply
    • 61 Views
  • What Is the Difference Between RNOR and NRI Tax Status in India?

    I moved abroad several years ago and have been filing my Indian tax returns as a non-resident. This year, however, I spent more time in India because of family and...

    • 3 Reply
    • 52 Views
  • Can I Avoid Paying Tax Twice on Rental Income?

    I am an NRI and receive rental income from a property in India. I currently live and pay taxes in another country, and I am confused about whether I will...

    • 3 Reply
    • 58 Views
  • Is a Tax Residency Certificate Mandatory for DTAA Benefits in India?

    I’m an NRI living and working outside India, and I receive some income from India. I’m trying to understand how the DTAA (Double Taxation Avoidance Agreement) works because I may...

    • 3 Reply
    • 60 Views
  • How Do I Convert My Savings Account into an NRO Account?

    I moved from India to the UK for work last year and have been using the same Indian savings account that I had before moving abroad. I recently found out...

    • 3 Reply
    • 64 Views
  • How Can I Avoid Penalties for Late Tax Filing?

    I missed the income-tax return filing deadline this year and only realised it after checking my tax records. I am an NRI and have some income in India, including bank...

    • 3 Reply
    • 65 Views
comunity img

Join Our Facebook Community of
NRIs/OCIs Like You

Join Community
Join Community