SECTION 44AE

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2010 A assess have been awarded contract for transportation of certain qty. He owns 5 trucks only and so he engages 8 attached trucks to complete the job. The freight is paid to assesse since the contract is in his name. He charges service charges or commission to attached truck owners.
The gross freight receipts for 2009-10 is expected to exceed Rs.40 lakhs.

Can he file his return u/s 44AE as he owns less than 10 trucks. He also derives commission income also and his gross business turnover is over Rs.40 laksh.

shrikant

shrikant (Expert)

21 February 2010 No, as receipt is more than Rs.40 lacs.

Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2010 IT IS AMPLY CLEAR THAT TURNOVER LIMIT OF RS.40 LACS DO NOT APPLY TO ASSESSES WHO OWN UPTO 10 TRUCKS.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

23 July 2025 You are absolutely right to seek clarity here, as there’s often confusion between Section 44AE and Section 44AD — both being presumptive taxation schemes but with different rules.

🔍 Clarifying Section 44AE:
Section 44AE applies specifically to assessee engaged in the business of plying, hiring or leasing goods carriages, and has ownership of not more than 10 goods vehicles at any time during the year.

✅ Key Points of Section 44AE:
Applicable To:

Individual, HUF, firm, company, etc.

Only if they own not more than 10 goods carriages at any time during the year.

Presumptive Income:

For heavy goods vehicle: ₹1,000 per ton of gross vehicle weight per month

For other vehicles: ₹7,500 per month per vehicle

Turnover Limit:

No turnover limit like Section 44AD (which has ₹2 crore cap)

Even if gross receipts exceed ₹40 lakh / ₹2 crore, Section 44AE can still apply if the number of owned trucks ≤ 10.

❓Your Case:
Owns 5 trucks → ✅ Eligible under Section 44AE

Uses 8 attached trucks (hired, not owned) → ❌ Not counted under ownership

Gross freight receipts > ₹40 lakhs → ✅ Still eligible under Section 44AE

Earns commission/service charges from attached truck owners → 🔴 This is separate business income and not covered under 44AE

✅ Conclusion:
Yes, the assessee can file presumptive income u/s 44AE for the 5 owned trucks.

The attached trucks are not "owned" → So do not affect 44AE eligibility.

Commission/service charges income from other trucks:

Not covered under 44AE

Should be declared under "Income from Business/Profession"

If total turnover from such income exceeds ₹2 crore, Section 44AB audit will apply (unless another presumptive section like 44AD is valid).

🧾 Return Filing Suggestion:
Use ITR-3 (or ITR-4 if also opting 44AD for other business income)

Show:

Presumptive income from 5 trucks under 44AE

Commission/Service charges as separate business income

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