Quick Answer: Under Section 44AD (businesses) with turnover up to ₹3 crore (digital receipts) or ₹2 crore (cash), 8% of turnover (6% for digital) is deemed profit — no books required. Section 44ADA (professionals) deems 50% of gross receipts (up to ₹75 lakh) as profit. This avoids audit and bookkeeping but you cannot claim additional business deductions.
Presumptive Taxation — File Without Books of Accounts
India's presumptive taxation scheme under Sections 44AD and 44ADA was designed to reduce compliance burden for small taxpayers. Instead of maintaining detailed books of accounts and getting a tax audit, these taxpayers declare a minimum percentage of their turnover as income.
Presumptive Tax Scheme Limits — FY 2025-26
| Section | Eligible Taxpayers | Turnover Limit | Presumptive Income |
|---|---|---|---|
| 44AD | Resident individuals, HUF, Firms in business | ₹3 Cr (digital) / ₹2 Cr (cash) | 6% of turnover (digital) or 8% (cash) |
| 44ADA | Professionals (doctors, lawyers, CAs, etc.) | ₹75 Lakh | 50% of gross receipts |
| 44AE | Goods carriage owners (up to 10 vehicles) | Per vehicle | ₹1,000/ton/month (for heavy vehicles) |
Frequently Asked Questions
Yes, but if you opt out of the 44AD scheme before 5 years, you cannot opt back in for the next 5 years. This cooling-off period doesn't apply to 44ADA.
No. Tax audit under Section 44AB is not required if you opt for presumptive taxation under 44AD or 44ADA and your declared income meets or exceeds the presumptive rate. This is one of the biggest compliance benefits of the scheme.