Presumptive taxation scheme of section 44AD of Income Tax Act.
The following persons can be adopted in his/her bushiness
1) Resident Individual
2) Resident Hindu Undivided Family
3) Resident Partnership Firm (not Limited Liability Partnership Firm)
A person adopting the presumptive taxation scheme can
A) declare income at a prescribed rate &
B) is relieved from tedious job of maintenance of books of account and alsofrom getting the accounts audited.
The presumptive taxation scheme of section 44AD can be opted by the eligible persons if the total turnover or gross receipts from the business do not exceed the limit prescribed under section 44AB (i.e., Rs. 2,00,00,000).
How to compute Taxable Income
in case of a person adopting the provisions of section 44AD, income will be computed on presumptive basis, i.e., @ 8% of the turnover or gross receipts of the eligible business for the year.
Income shall be calculated at rate of 6% in respect of total turnover or gross receipts which is received by an account payee cheque or draft or use of electronic clearing system.