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TMI BlogPresumptive profits and gains of business of plying, hiring or leasing goods carriages: Clause 58 of the Income Tax Bill, 2025 vs. Section 44AE of the Income Tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision for computing profits and gains of business or profession on presumptive basis in case of certain residents. Income Tax Bill, 2025 Introduction The Income Tax Bill, 2025 introduces Clause 58, which aims to streamline the computation of profits and gains from certain businesses or professions on a presumptive basis for specific residents. This clause is particularly relevant for busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declare income on a presumptive basis, thereby minimizing the need for detailed bookkeeping and audits. This approach is particularly beneficial for small businesses with limited resources. Similarly, Section 44AE of the Income Tax Act, 1961, was introduced to offer a straightforward method for computing income from goods carriages, reducing the compliance burden on small transport operators. Det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income claimed to have been actually earned is higher than the presumptive income, the higher amount is considered. * Record Keeping and Audit: Assessees claiming lower profits than the presumptive income must maintain books of account and get them audited. * Non-Applicability of Other Deductions: No other deductions or allowances are permitted against the presumptive income. * Firm-spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. * Deduction of Salary and Interest: For firms, salary and interest to partners are deductible. * Depreciation: Written down value of assets assumes depreciation is claimed and allowed. Practical Implications Both Clause 58 and Section 44AE aim to simplify tax compliance for small transport operators by allowing presumptive taxation. This approach reduces the need for detailed accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961, both provide a simplified tax regime for small transport operators. While Clause 58 introduces these provisions as part of a broader legislative overhaul, Section 44AE has been a longstanding provision. Taxpayers must evaluate their specific circumstances to determine the most beneficial approach. Future reforms may further refine these provisions to enhance clarity and compliance. &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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