Section 44AD Business Tax Calculator 2026

A scheme where eligible small businesses declare income at a presumed 8% of turnover, or 6% for receipts through banking channels and digital modes, instead of maintaining detailed books. Tax is then paid on that presumed profit at normal slab rates.

₹2 crore normally, raised to ₹3 crore where cash receipts do not exceed 5% of total turnover. The scheme is available to resident individuals, HUFs and partnership firms — not to companies, LLPs or commission and brokerage businesses.

No, as long as you declare at least the presumed rate. If you declare lower profit than 8% or 6% and your total income exceeds the basic exemption limit, you must maintain books under Section 44AA and get a tax audit under Section 44AB.

In a single instalment — 100% of the liability by 15 March, instead of the usual four quarterly instalments. Missing that date attracts interest under Section 234C on the full amount, so the concession is in the schedule, not the obligation.

Once you declare profits under Section 44AD, you are expected to continue. If in any of the next five assessment years you declare profits below the presumptive rate, Section 44AD(4) bars you from the scheme for the five assessment years following that year. For those years you must keep books under Section 44AA and get a tax audit under Section 44AB if your total income crosses the basic exemption limit. Opting out is a five-year decision, not a yearly one.

No. The 8% or 6% you declare is deemed to be your profit after every deduction under Sections 30 to 38, so rent, salaries, interest and depreciation are all treated as already allowed. Written down value is still reduced each year as if depreciation had been claimed, which matters when you later sell the asset or leave the scheme. Since Finance Act 2016, a firm cannot deduct partners' salary or interest on top either. What you may still claim are Chapter VI-A deductions, subject to your regime.

They are close but not identical, and the difference causes most notices. GST turnover on the portal is the value of taxable supplies for the GST year and is reported exclusive of tax where you have charged GST separately. Section 44AD turnover is your total sales, turnover or gross receipts from the business for the financial year. Exempt supplies, sale of fixed assets and non-business receipts can move one figure and not the other, so reconcile GSTR-3B totals with your books before filing.