Fact-check notes
Last fact-checked: 2026-06-04
AY 2026-27 return filing for FY 2025-26 is governed by the Income-tax Act, 1961. The Income-tax Act, 2025 applies from Tax Year 2026-27 onward, so new-section references must be checked against the live portal before filing.
This page is preparation guidance for scoping work on WorkIndex. Ask the expert to verify active law, portal forms, notifications and your documents before filing or signing anything.
What this covers
Presumptive Income Section 44ADA New Act Guide is written with a transition caution: AY 2026-27 for FY 2025-26 remains under the 1961 Act, while the 2025 Act applies from Tax Year 2026-27 onward.
- Section 44ADA is an Income-tax Act, 1961 reference for eligible professionals.
- For Tax Year 2026-27 onward, verify new Act section mapping and form utility.
- Profession type, gross receipts, expenses and GST/TDS data should be checked.
- Lower profit or ineligible profession cases may need books and audit review.
Who this is for
- Taxpayer preparing AY 2026-27 filing.
- CA updating checklists for new Act transition.
- Business finance team training staff.
- Founder trying to understand old and new section labels.
Documents and details to prepare
- Assessment year and tax year.
- Return forms and official portal utility.
- Computation and evidence for claim.
- Old Act and new Act section mapping notes.
Common mistakes to avoid
- Using new Act section labels for old Act filings.
- Relying on unofficial mappings without portal check.
- Not keeping evidence for loss or deduction claims.
- Missing due-date conditions for carry-forward.
How to brief the expert
- Mention the city, entity type, transaction value, deadline and current portal status.
- Upload or list the records available so the expert can quote accurately.
- Ask for scope, deliverables, timeline, assumptions and government fee exclusions in writing.
- Keep acknowledgements, challans, filings, certificates and advice notes after completion.
FAQs
Can WorkIndex help with this?
Yes. Post your requirement and compare relevant experts by scope, quote, timeline and supporting documents needed.
Is this page legal or tax advice?
No. It is a preparation guide. Your expert should verify current law, portal forms, notifications and your documents before filing or signing.
What should I include in my post?
Include the city, year or period, entity type, deadline, notices if any, documents available and whether you need filing, review, drafting or ongoing support.
Frequently Asked Questions
1. Can small businesses or professionals declare presumptive tax on income from Presumptive Income Section 44ADA New Act Guide?
Yes, eligible taxpayers can opt for presumptive taxation under Section 44AD (businesses declaring 6% or 8% profit) or Section 44ADA (professionals declaring 50% profit) for income from Presumptive Income Section 44ADA New Act Guide.
2. What are the benefits of opting for presumptive tax for Presumptive Income Section 44ADA New Act Guide?
Opting for presumptive tax for Presumptive Income Section 44ADA New Act Guide exempts the taxpayer from maintaining detailed books of accounts under Section 44AA and undergoing a tax audit under Section 44AB, saving compliance costs.
3. What are the revised turnover limits for presumptive taxation?
Under the current rules, the limit is ₹3 crore for businesses (increased from ₹2 crore) and ₹75 lakh for professionals (increased from ₹50 lakh), provided that cash receipts do not exceed 5% of the total turnover/gross receipts.
4. Which ITR form should presumptive tax filers use?
Taxpayers opting for presumptive taxation under Section 44AD or 44ADA should file Form ITR-4 (Sugam), provided they do not have capital gains, foreign assets, or income from more than one house property. If they do, they must file ITR-3.
5. Are presumptive tax filers required to maintain books of accounts?
No. Taxpayers opting for Section 44AD or 44ADA are exempt from the requirement of maintaining books of accounts under Section 44AA and getting them audited under Section 44AB.
6. What is the 5-year lock-in rule under Section 44AD?
If a business taxpayer opts out of Section 44AD in any year after claiming it, they cannot opt back into the presumptive scheme for the next 5 consecutive assessment years. This lock-in rule does not apply to professionals under Section 44ADA.
7. When is the due date to pay advance tax under presumptive taxation?
Taxpayers opting for Section 44AD or 44ADA must pay 100% of their advance tax liability in a single installment on or before March 15 of the financial year. Failure attracts 1% monthly interest u/s 234C.
8. Can I claim business expenses or depreciation under presumptive tax?
No. The presumptive profit rate (6%/8% or 50%) is deemed to be final. All business expenses, including depreciation on assets and interest to partners, are deemed to have been already allowed. No further deductions can be claimed.
9. What happens if my actual profit is higher than the presumptive limit?
If your actual profits are higher than 8%/6% (for business) or 50% (for professionals), you must declare the higher actual profits in your ITR. The presumptive rates represent the statutory minimum, not a cap.
10. Can a partnership firm claim partner salary under Section 44AD?
No. Under recent amendments, partner salary and interest on capital cannot be deducted from the presumptive income calculated u/s 44AD. The profit must be declared as calculated.
11. Does Section 44AD apply to commission or brokerage business?
No. Section 44AD(6) explicitly excludes commission agents, brokers, agency businesses, and professionals from claiming presumptive tax benefits under this section.
12. What is Section 44AE presumptive taxation?
Section 44AE applies to taxpayers engaged in the business of plying, hiring, or leasing goods carriages. The presumptive profit is calculated per vehicle per month (e.g. ₹1,000 per ton for heavy goods vehicles) up to 10 vehicles.
13. What if my turnover exceeds the ₹3 crore / ₹75 lakh limits?
If your turnover/receipts exceed the limits, you must maintain regular books of accounts u/s 44AA, get them audited u/s 44AB, and file ITR-3 or ITR-5.
14. Can a Private Limited Company or LLP opt for presumptive tax?
No. Presumptive taxation under Section 44AD and 44ADA is strictly restricted to resident individuals, HUFs, and partnership firms. Companies and LLPs are excluded.
15. What should I do if my actual business profits are less than 6%/8%?
If your actual profits are lower than the presumptive rates, you cannot file under the presumptive scheme. You must maintain books of accounts u/s 44AA and get them audited by a Chartered Accountant u/s 44AB.