Computing Profits and Gains of Profession on Presumptive Basis: Clause 58 of the Income Tax Bill, 2025 vs. Section 44ADA of the Income Tax Act, 1961

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..... profits and gains of business or profession on presumptive basis in case of certain residents. Income Tax Bill, 2025 Introduction Clause 58 of the Income Tax Bill, 2025 introduces a special provision for computing profits and gains of business or profession on a presumptive basis for certain residents. This provision is designed to simplify the tax compliance process for small taxpayers engaged .....

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..... esumptive taxation has been introduced to encourage voluntary compliance and reduce administrative costs. Detailed Analysis 1. Key Provisions of Clause 58 Clause 58 of the Income Tax Bill, 2025, outlines the framework for presumptive taxation for specified professions. The key provisions include: * Exemption from sections 26 to 54 for specified businesses or professions, as mentioned in the t .....

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..... tnerships and certain other entities. 2. Comparison with Section 44ADA of the Income Tax Act, 1961 Section 44ADA provides a similar presumptive taxation scheme for professionals. The main points of comparison are: Eligibility and Scope * Clause 58: Applies to specified professions u/s 62(1)(a), with a turnover limit of Rs. 50,00,000 or Rs. 75,00,000 under certain conditions. * Section 44ADA .....

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..... llowed, preventing further deductions. Asset Depreciation * Clause 58: Specifies that asset depreciation is calculated as if it were claimed and allowed. * Section 44ADA: Similar provision for asset depreciation. Practical Implications The introduction of Clause 58 is expected to have significant implications for professionals opting for presumptive taxation. It simplifies compliance by red .....

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