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Presumptive taxation scheme lets the taxpayers declare their taxable profits at a prescribed charge irrespective of real financial gain/gains and in turn relieves them from your stress of retaining normal guides of account and receiving the identical audited.
Section 44AD – According to Segment 44AD, where by a taxpayer opts for presumptive taxation plan for any in the economic 12 months he is required to continue to decide for the same for following five many years. If he fails to do so, he will not be eligible to opt for presumptive taxation scheme u/s 44AD for five several years succeeding the year wherein he opts out. Additional, with respect to All those five monetary yrs the place taxpayer is ineligible to go for presumptive taxation scheme u/s 44AD, normal textbooks of account must be maintained and audit shall be conducted if complete revenue exceeds essential exemption Restrict.
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If your taxpayer can not choose a presumptive revenue scheme to the five years, i.e. he has not complied with part 44AD(four), and his total profits exceeds the quantity not chargeable to tax, He's liable to keep up textbooks of accounts.
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Nevertheless, to supply relief to little taxpayers from the tiresome occupation of maintaining textbooks of account and receiving them audited, earnings tax law has introduced the notion of presumptive taxation scheme.