A presumptive scheme for the goods transportation business.
## Eligible Assessee
Any assessee (resident or non-resident, individual, firm, company etc.)
Engaged in business of plying, hiring or leasing goods carriages
Owns NOT more than 10 goods carriages at any time during the P.Y.
## Presumptive Income (Per Vehicle, Per Month)
Type of Goods Vehicle
Presumptive Income
Heavy Goods Vehicle (Gross Vehicle Weight > 12 tonnes / 12,000 kg)
₹1,000 × weight in tonnes × number of months (or part of a month) of ownership
Other Vehicle
₹7,500 × number of months (or part of a month) of ownership
Note: For heavy vehicles, the rate is per tonne; even a partial month counts as a full month.
## Deductions
No further deduction under sections 30–38 (depreciation, expenses, etc.)
However, partner's salary/interest under section 40(b) IS deductible (unlike 44AD/44ADA).
## Books & Audit
Scenario
Books / Audit
Opts into 44AE
Not required
Does not opt and declares income less than presumptive
Required
## Other Points
Advance tax payable in 4 installments (normal schedule, unlike the single installment under 44AD/44ADA).
ROI due date: 31st July
Worked example
### Example 1
Example 1 — Heavy vehicle: Mr. P owns 1 heavy goods vehicle of 16 tonnes for all 12 months. Presumptive income = ₹1,000 × 16 × 12 = ₹1,92,000.
### Example 2
Example 2 — Light vehicle, partial month: Ms. Q owns a light commercial vehicle from 10th August to 31st March (7 months and 22 days = 8 months, since part-month counts as full). Presumptive income = ₹7,500 × 8 = ₹60,000.
### Example 3
Example 3 — Mixed fleet: A firm owns 3 heavy vehicles (each 15 tonnes, for 12 months) and 2 light vehicles (for 12 months). Income = (3 × ₹1,000 × 15 × 12) + (2 × ₹7,500 × 12) = ₹5,40,000 + ₹1,80,000 = ₹7,20,000. Partner's interest/salary can be further deducted u/s 40(b).
### Example 4
Example 4 — Disqualified: A transporter who owns 12 trucks at any point during the year is NOT eligible (limit is 10).
⚠️ Common exam mistakes
Applying ₹1,000 × tonnes formula to all goods vehicles — it applies ONLY to heavy goods vehicles (>12 tonnes).
Counting part of a month as a fraction — even one day counts as a FULL month.
Forgetting that section 40(b) deduction IS available under 44AE (unlike 44AD/44ADA).
Applying the 10-vehicle limit at year-end only — limit applies at ANY time during the P.Y.
Paying advance tax in one installment — under 44AE it's the normal 4 installments.
Bare-Act text Section 44AE · Income Tax Act, 1961 · click to expand
Section 44AE provides that in case of an assessee owning not more than ten goods carriages at any time during the previous year and engaged in the business of plying, hiring or leasing such goods carriages, the income from each goods carriage shall be deemed to be: (a) for heavy goods vehicle (gross weight exceeding 12,000 kg), an amount equal to ₹1,000 per ton of gross vehicle weight or unladen weight for every month or part of a month during which it is owned; (b) for any other goods carriage, ₹7,500 for every month or part of a month during which it is owned. Deductions under sections 30 to 38 shall not be allowed, except partner's remuneration/interest u/s 40(b).