Section 44AD - Presumptive Taxation for Small Businesses
Small businesses with turnover up to ₹3 crore (₹3.75 crore if 95%+ digital receipts) can declare 8% of turnover as income (6% for digital transactions) without maintaining books of accounts.
Key provisions
- Turnover limit: ₹3 crore (if cash receipts ≤ 5% of total receipts - limit ₹3.75 crore)
- Declared income: minimum 8% of gross receipts; 6% for payments received digitally
- No books of accounts required if 44AD opted
- Cannot claim any business expenses or depreciation
- If opted out before 5 consecutive years, cannot re-opt for 5 years
- Not available to professionals - use Section 44ADA for professionals
FAQs
₹3 crore. If 95% or more of your gross receipts are through digital/banking channels (non-cash), the limit increases to ₹3.75 crore. If your turnover exceeds these limits, you must maintain books and may need a tax audit under Section 44AB.
Use via API
GET/v1/tax-law/sections/by-2025-ref/193
Programmatic access - free, no signup required. ISR-cached for 24 hours.
REQUEST · cURL
curl https://api.thynktax.com/v1/tax-law/sections/by-2025-ref/193
RESPONSE · 200 OK
{
"act_2025_ref": "193",
"old_reference": "Section 44AD, Income Tax Act 1961",
"title": "Section 44AD - Presumptive Taxation for Small Businesses",
"category": "Presumptive Taxation",
"limit_or_rate": "8% of turnover (6% for digital receipts)",
"applicable_to": "Individual, HUF, Firm (not LLP, company)",
"effective_from": "2026-04-01"
}