Are you a professional? Are you confused regarding your income tax obligation? If yes,we hope most of your queries will be resolved below !!


Which professions are specified for presumptive taxation benefit of income tax?

Every person carrying on

  • legal,
  • medical,
  • engineering or
  • architectural profession or
  • the profession of accountancy or
  • technical consultancy or
  • interior decoration or
  • any other profession as is notified by the Board in the Official Gazette

Eligibility for Presumptive Taxation ?

  • a resident in India
  • who is engaged in a specified profession
  • Whosetotal gross receipts do not exceed fifty lakh rupees (i.e. < Rs 50 Lakhs) in a previous year.
What is Presumptive Taxation for specified professionals who are eligible for the provisions?

A sum equal to fifty per cent of the total gross receipts of the assessee in the previous year on account of such profession or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the assessee, shall be deemed to be the profits and gains of such profession chargeable to tax under the head "Profits and gains of business or profession.

No need to maintain books of accounts or get a Tax Audit.

Limitations of presumptive taxation provision?

Any deduction allowable under the provisions of sections 30 to 38 of the act i.e. any kind of business expenditure shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed.

Also, the written down value of any asset used for the purposes of profession shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.

Therefore the profits are assumed to be 50% of gross receipts and will be taxed accordingly.

What if the professionals profits are less than the presumed 50% or he does not want to avail presumptive taxation benefits?

An assessee who claims that his profits and gains from the profession are lower than the profits and gains specified in sub-section (1) i.e. 50% of gross receipts and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to

  • keep and maintain such books of account and other documents as required under sub-section (1) of section 44AA and
  • Get them audited and furnish a report of such audit as required under section 44AB.

What if the gross receipts are more than 50 lakhs?

  • shall keep and maintain such books of account as required by sec 44AA
  • gets books audited as per Sec44AB

What if assessee is a professional but not a professional as specified in list above?

  • Compulsory maintenance of books of accounts

-if his income from business or profession exceeds one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds ten lakh rupees in any one of the three years immediately preceding the previous year; or (provisions up to 31/03/2018)

-where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed ten lakh rupees, during such previous year( provisions up to 31/03/2018)

(w.e.f 01/04/2018 - in the case of a person being an individual or a Hindu undivided family, shall have effect, as if for the words "one lakh twenty thousand rupees", the words "two lakh fifty thousand rupees" had been substituted.

w.e.f. 01/04/2018- in the case of a person being an individual or a Hindu undivided family, the provisions shall have effect, as if for the words "ten lakh rupees", the words "twenty-five lakh rupees" had been substituted.)

  • Compulsory Tax Audit

Every person carrying on profession shall, if his gross receipts in profession exceed fifty in any previous year get a tax audit done.


( For Rates of Income Tax and Due Dates of Income Tax Return please refer our other blogs/ articles)


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