44ae income tax ay 2019-20

Eligibility Criteria

As mentioned above, the business of hiring, plying or leasing goods carriage vehicles are eligible for Presumptive Taxation Scheme.  So, there are only two important criteria for eligibility:

The business of hiring, plying and leasing goods carriage. If an assessee is engaged in a trade of passenger carrying vehicles or passenger transport cannot opt for such a scheme.

Owning not more than ten goods carriage vehicles. It means that an assessee owning more than ten such vehicles cannot opt for such a scheme.

Calculation of Income under Section 44AE

Income for eligible assessee opting for Presumptive Taxation Scheme under Section 44AE will be calculated on an estimated basis as described below:

The net total taxable incomes for such business will be calculated at the rate of Rs. Seven thousand five hundred per vehicle per month or part thereof the month during which the assessee owns the goods carriage in the previous year.

The assessee can declare a higher amount than that specified above.

The calculation will be irrespective of the fact whether it is a light goods vehicle (less than or equal to 12MT gross weight) or a heavy goods vehicle (more than 12MT gross weight).

It should be noted that part of the month will be considered AS full month to calculate income under the Section 44AE

The income computed above shall be the net income of the assessee, and no expense, in any case, shall be allowed as deduction.

Amendment as per the Finance Bill 2018

For the financial year, 2018 – 2019, the following provision for the calculation of taxable income under section 44AE shall be applicable.

For light goods vehicle (less than the gross weight of 12MT) Rs. 7,500  per vehicle per month (part shall be considered full month).

For heavy goods vehicle (more than 12 MT gross weight) – Rs. One thousand per tonne per vehicle per month (part will be considered full month)

Meaning of gross weight???