Section 44AE
Section 44AE

Scheme of section 44AE is designed to give relief to small taxpayers. Its key points:

  1. This scheme can be adopted by a person who is engaged in the business of plying, hiring or leasing of goods carriages and who does not own more than 10 goods vehicles at any time during the year.
  2. A person who owns more than 10 goods vehicles cannot adopt the presumptive taxation scheme of section 44AE
  3. In case of a person who is willing to opt for the presumptive taxation scheme of section 44AE, income will be computed on an estimated basis.
  4. For Heavy Goods Vehicle, income will be computed at the rate of Rs. 1,000 per ton of gross vehicle weight for every month or part of a month during which the heavy goods vehicle is owned by taxpayer. “Heavy Goods Vehicle” means any goods carriage having gross vehicle weight exceeding 12,000 kgs.
  5. In case of vehicles other than heavy goods vehicle, income will be computed at the rate of 7,500 for every month or part of a month during which the goods carriage is owned by taxpayer. Part of the month would be considered as full month.
  6. If the actual income is higher than the presumptive rate, i.e., higher than Rs. 1,000/Rs. 7,500, then such higher income can be declared.
  7. In case of a person opting for this scheme, the provisions of section 44AA relating to maintenance of books of account will not apply.
  8. The presumptive income computed at the rate of Rs. 1,000 per ton or Rs. 7,500 per goods vehicle per month is the final income and no further expenses will be allowed or disallowed.
  9. There is no concession as regards payment of advance tax in case of a person who adopts this scheme and, hence, he will be liable to pay advance tax even if he adopts the presumptive taxation scheme of section 44AE.
  10. If an assessee is opting for the presumptive tax scheme of Section 44AE, the tax audit under section 44AB shall not be required in the case of such assessees.
  11. A person can declare his income at lower rate (i.e., at less than Rs. 1,000 per ton or Rs. 7,500 per goods vehicle per month). However, if he does so, then he is required to maintain the books of account as per the provisions of section 44AA and has to get his accounts audited u/s 44AB.