# Presumptive Taxation — Section 44AD
Section 44AD provides a simplified scheme for small businesses so that they don't have to maintain detailed books or undergo audit.
## Eligible Assessee
- Resident Individual, HUF, or Firm (not LLP)
- Engaged in any business EXCEPT:
- Notified Professions (covered under 44ADA)
- Section 44AE business (goods carriage)
- Commission business
- Agency business
## Eligible Turnover Limit
- Total turnover / gross receipts up to ₹2 crore in P.Y.
- Enhanced limit: ₹3 crore, if cash receipts (incl. bearer/crossed cheque) ≤ 5% of total turnover.
## Presumptive Income
| Mode of Receipt | Presumptive Income |
|---|---|
| Turnover received via A/c payee cheque/DD/ECS/electronic mode up to ROI due date | 6% of such turnover |
| Other (cash) | 8% of such turnover |
Hence digital receipts are taxed lighter — a deliberate policy push.
## Deductions
- No further deduction of expenses under sections 30–38 or section 40(b) (partner's remuneration/interest).
- The 6%/8% is the final taxable income from the business.
## Books & Audit
| Scenario | Books / Audit |
|---|---|
| Opts into 44AD | Not required |
| Does not opt AND total income exceeds basic exemption limit | Required |
## The 5-Year Lock-in Rule
If the assessee declares income under 44AD in a P.Y. and then does NOT declare under 44AD in a subsequent year, he is barred from 44AD for the next 5 years following the year of non-declaration.
## Other Points
- Advance tax: One installment by 15th March of the P.Y.
- ROI due date: 31st July