Table of Contents
1. What is the applicability of presumptive taxation scheme under section 44AE?
- The presumptive taxation scheme u/s 44AE can be adopted by a person who is engaged in the business of,
- Plying (or) Hiring (or) Leasing of goods carriages
- Provided he/she does not own more than 10 goods vehicles at any time during the previous year.
2. Who is eligible to take advantage of the presumptive taxation scheme of section 44AE and?
Provisions of sections 44AE are applicable to all asseesees.
3. What if the taxpayer owns more than 10 goods carriages at any time during the PY?
The taxpayer will be considered as a normal business and cannot opt for presumptive taxation scheme under section 44AE.
4. What is the manner of computing income under section 44AE?
- Manner of computing income depends on the nature of vehicle owned by the assessee.
- The following are the types of vehicle the assessee might own,
- Heavy goods vehicle (or) vehicles other than heavy goods vehicle.
5. How to calculate income from a heavy goods vehicle under section 44AE?
- The income shall be,
- An amount equal to Rs.1000 per ton of Gross vehicle weight (or) unladen weight (for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the PY).
(or) - An amount actually earned from such vehicle, whichever is higher.
6. How to calculate income from any other vehicles under section 44AE?
- The income shall be
- An amount equal to Rs. 7,500/- per vehicle for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year
(or) - An amount actually earned from such vehicle, whichever is higher.
7. What is meant by a heavy goods vehicle for the purpose of section 44AE?
The expression “heavy goods vehicle” means any goods carriage, the gross vehicle weight of which exceeds 12 tonnes/ 12000 kilograms.
8. Can I claim deduction of any expenditure if I opt to pay tax under section 44AD?
- No expenditure under section 30 – 38 is allowed as deduction.
- However, if the taxpayer is a partnership firm, remuneration and interest paid to partners under section 40(b) of the act is allowed as further deduction to the income computed under the provisions of section 44AD since it does not fall within section 30-38.
9. Should I maintain books of accounts if I opt to pay tax under section 44AE?
No, Maintenance of books of accounts prescribed under section 44AA will not apply.
10. Can I declare a lower income than the limit prescribed under this section?
- If you declare an income lower than income prescribed under this section (Refer FAQ 4,5 & 6) and that amount of income exceed the maximum amount not chargeable to tax (basic exemption limit),the taxpayer cannot claim the benefits of presumptive taxation scheme,
- Consequently, he is required to maintain books of accounts under section 44AA and is required to get his books of accounts audited under section 44AB.