Presumptive Taxation

 LEGALLY PAY ZERO TAX UP TO ₹2 CRORE TURNOVER! 🤯

Ever wondered how businesses and professionals can significantly reduce their tax burden—legally? 🎯 Let’s dive into the fascinating world of Presumptive Taxation under Sections 44AD & 44ADA and uncover how you can potentially pay ZERO tax on your earnings! 🚀 🔹 Section 44AD: Zero Tax for Businesses up to ₹2 Crore! ✅ Who Can Benefit? Resident Individuals, HUFs, and Partnership Firms (except LLPs) Businesses with turnover up to ₹2 crore (or even ₹3 crore if cash receipts are ≤ 5%)! ❌ Who is NOT Eligible? Commission or brokerage businesses Agency businesses Specified professionals under Section 44ADA Transport businesses (covered under Section 44AE) 🔢 How Is Taxable Income Calculated? 8% of total turnover (if cash transactions) 6% of total turnover (if digital transactions) 📋 Audit Requirement ✅ NO AUDIT needed if you declare profit as per the above rates! 📌 Audit required ONLY if declared profit is lower AND total income exceeds the exemption limit. ⏳ Lock-in Period 🔒 Once you opt for this scheme, you must stick with it for 5 years—otherwise, you lose eligibility for the next 5 years! 🔹 Section 44ADA: Zero Tax for Professionals up to ₹24 Lakh! ✅ Who Can Benefit? Resident Individuals & Partnership Firms (except LLPs) Professionals with gross receipts up to ₹50 lakh (or even ₹75 lakh if cash receipts are ≤ 5%)! 🎯 Eligible Professions (As per Section 44AA) ✅ Advocates & Lawyers 🏛️ ✅ Doctors, Surgeons, Dentists 🏥 ✅ Engineers & Architects 🏗️ ✅ Chartered Accountants (CAs), Cost Accountants (CMAs) 📊 ✅ Technical Consultants 💡 ✅ Interior Decorators 🏡 ✅ Other notified professions 🎨 🔢 How Is Taxable Income Calculated? 50% of gross receipts is considered taxable income. 📋 Audit Requirement 📌 Audit required ONLY if declared profit is less than 50% AND total income exceeds the exemption limit. 🚀 More Flexibility than 44AD! Unlike Section 44AD, NO LOCK-IN PERIOD—you can opt-in and opt-out any year! 🎯 🔥 Key Takeaways: How Can You Pay ZERO Tax? 1️⃣ Under Section 44AD, if your business has a turnover up to ₹2 crore and expenses are high enough to nullify taxable income, you may owe ZERO tax! 2️⃣ Under Section 44ADA, if your professional income is up to ₹24 lakh, and deductions reduce your taxable income below the basic exemption limit, you pay ZERO tax! 3️⃣ No Audit Hassle—as long as you declare income per the prescribed presumptive rates! 💡 Pro Tip: By opting for digital transactions, you can benefit from the lower 6% presumptive tax rate under Section 44AD, making tax-saving even more effective! 🚀 Final Thought: Should You Opt for Presumptive Taxation? If you're a small business owner or a professional with moderate income, this scheme is a game-changer! It reduces tax burdens, simplifies compliance, and even allows you to legally pay ZERO tax in many scenarios! 💯