Presumptive Tax scheme is meant for the small businessman and professionals who cannot afford to hire a professional accountant. On most occasions, incomplete filing can be seen as the under compliance of the taxation or even non-disclosure of the income. To make sure that the honest taxpayers do not have to bear the brunt, the presumptive ITR has minimal compliance requirements.
Presumptive Tax
Who can Select Presumptive Taxation Scheme?
All eligible resident individuals, Hindu undivided families and resident partnership firms can opt for the taxation scheme. The professionals who can opt for the PTS scheme are :
Doctors
Engineer
Architect
Interior Designer
Technical consultant
Lawyers
Accountant
Any other professional as notified by CBDT
There are certain rules and regulations in place related to who can opt for the PTS on few factors such as
Receipts
Nature of the business
Profession for option PTS.
Take for instance, an individual who has the total receipt of less than Rs 50 lakhs annually and does not own more than 10 good carriages and is into the business of plying, hiring or leasing can go for the PTS.
| Business | Professionals | Transporters | |
| Relevant Section | 44AD | 44ADA | 44AE |
| Maximum turnover | Rs 2 Crore | Rs 50 lakh | Up to 10 trucks |
| Profit or income to be declared | 8% of the turnover(6% of the digital income) | 50% of total receipts | Rs 7,500 per truck |
Who is not eligible?
- Limited Liability partnership firms
- Businesses that avail the benefit of SEZs or backward area
- If the nature of the income is commission or brokerage
ITR to be selected
Those taxpayers who wish and are eligible to avail PTS under Sections 44AD, 44ADA or 44AE would need to select ITR 4. There has been a lot of changes made in the ITR 4 this year and some of the notable ones are:
- Four financial of the business namely total debtors, total creditors, cash balance and total stock in trade
- Details of secured/ unsecured loans, fixed assets, capital account and so on
- GSTR number of the assessee and the turnover as per GST return filed by the assessee.
Structure of ITR 4
- General Information
- Gross total income from the five heads of income
- Deduction and total taxable income
- Tax computation and tax status
- Verification & signatures on the return
- Details of income from Business
Is GSTR number necessary?
Under the GST regulations, if a businessman or professional has a turnover below Rs 20 lakh during the last fiscal year, there is no need of GST registration and he is eligible for PST. The GSTR number should be left blank.
In case the taxpayer has capital gains along with the business income, then he should opt for ITR-3 rather than ITR 4 according to the tax experts.
Looking for tax filing help call @09902977233 or email @info@saidigitalsignature.com
