Section 44AD: Benefits of Opting for the Presumptive Scheme

Srinidhi S | Last updated: 24 October 2025

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Section 44AD of the Income Tax Act offers a simplified presumptive taxation scheme for eligible small businesses. It allows taxpayers to declare a fixed percentage of their total turnover or gross receipts as income, reducing the compliance burden. This scheme is available for individuals, HUFs, and partnership firms (not LLPs) engaged in eligible businesses with turnover up to Rs. 2 crore or Rs. 3 crore. Once opted in, taxpayers must continue with the scheme for five consecutive years to retain its benefits.

Section 44AD of the Income Tax Act, 1961, provides a simplified method of taxation for eligible taxpayers who carry on small businesses. It allows them to declare a fixed percentage of their total turnover or gross receipts as income. This is called the presumptive way of taxation. The main objecti

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About the Author

Srinidhi S

Chartered accountant

I am a qualified Chartered Accountant with professional experience in taxation, statutory audit (2.5 years), and financial due diligence (1 year) at Ernst Young. Having cleared the CA examinations in my first attempt, I have been recognized with multiple performance awards and consistently received positive client fe ... Read more

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