Presumptive Taxation Scheme For Professionals

INTRODUCTION

Vide Finance Bill 2016, the Government has introduced presumptive taxation scheme for the persons earning professional income. The existing scheme of presumptive taxation is dealt under section 44AD of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), wherein the section provides for simplified taxation scheme for eligible persons engaged in certain eligible business only. Persons earning professional income were excluded from this list prior to this proposed amendment.

What is presumptive taxation scheme (PTS)? Presumptive taxation is a scheme under which one can file the return on the basis of 'presumed' income. Accordingly, under PTS, the professionals, whose gross receipts does not exceed fifty lakh rupees, and eligible businesses, as prescribed under the Act, can compute income on presumed/estimated basis under section 44ADA and Section 44AD of the Act, respectively, at a minimum prescribed rate.