Section 44AD (Presumptive Taxation): Definition, Meaning & Guide for Indian Businesses

Section 44AD lets small businesses with turnover up to 2 crore declare 8 percent of turnover (6 percent for digital receipts) as deemed income, skipping audit and detailed books.

What is Section 44AD (Presumptive Taxation)?

Section 44AD is the presumptive taxation scheme for small businesses. If your turnover is up to 2 crore (3 crore from FY 2023-24 if at least 95 percent of receipts are through digital modes), you can declare 8 percent of turnover as deemed income (6 percent for digital receipts). You do not need to maintain detailed books or get accounts audited. Once you opt in, you must continue for at least 5 years.