What is Section 44AD?

Small businesses can declare income at a presumed rate of 6% or 8% of turnover without maintaining detailed books of accounts.

Who Can Opt?

  • Resident individuals, HUF and Partnership firms (not LLP or company)
  • Business turnover up to Rs.3 crore
  • Not applicable for professionals (use 44ADA), agency business, commission income

Deemed Profit Rate

  • 8% of turnover for cash receipts and payments
  • 6% of turnover for digital receipts via NEFT, UPI, cheque

Benefits

  • No books of accounts required
  • No audit required
  • File ITR-4 (Sugam) -- simple form

5-Year Lock-in Warning

If you opt out of 44AD after claiming it, you cannot opt back in for 5 years. Audit under 44AB becomes mandatory if you opt out and income is above basic exemption.

Section 44ADA -- For Professionals

Doctors, lawyers, CAs, engineers -- 50% deemed profit on gross receipts. Turnover limit Rs.75 lakh.

MyCamate files ITR-4 under presumptive taxation for small businesses at Rs.999