BooksIQA resident individual, HUF, or partnership firm (not LLP) with business turnover up to ₹2 Cr (₹3 Cr if 95%+ digital receipts) can declare presumptive profit at 8% of turnover (6% on the digital portion).
Key points
- The eligible assessee is a resident individual, HUF, or partnership firm — NOT an LLP and NOT a Pvt Ltd company.
- The turnover cap is ₹2 Cr, raised to ₹3 Cr where cash receipts are ≤ 5% of total receipts (Finance Act 2023).
- The presumptive rate is 8% of turnover for cash receipts and 6% of turnover for digital or banking-mode receipts.
- Once §44AD is claimed, there is a 5-year lock-in: opting out before the five-year period requires both a tax audit and maintenance of books for the next five FYs.
- Agency, commission, brokerage, and professional businesses are excluded — those go to §44ADA.
- Salary and interest paid to partners cannot be deducted separately from the presumptive profit (the profit is computed gross of these).
- The advance-tax cycle is simplified to a single instalment by 15 March — the regular quarterly schedule does not apply.
Reference: §44AD, ITA 1961 — under ITA 2025 (FY 26-27 onwards), this is §58
This page is general information for Indian businesses, current as of the
financial year shown above — not legal or tax advice. Tax law changes,
and how a provision applies depends on your specific facts. Confirm the
current position with a qualified professional before you act.
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