Presumptive taxation
A simpler tax scheme where your income is taken as a fixed share of your receipts.
Presumptive taxation is a simpler way to work out income for small businesses and some professionals. Instead of keeping detailed accounts, you declare a fixed share of your receipts as income: 50% for listed professions, 6% or 8% for small businesses. Users of the scheme can pay the year’s advance tax in one go by 15 March. See managing an irregular income.
Questions people ask
What is presumptive taxation?
It's a scheme in section 58 of the Income-tax Act, 2025 that lets small businesses and some professionals declare income as a fixed share of their receipts, instead of keeping detailed accounts. Tax is then charged on that income at the normal slab rates.
What are the limits for professionals?
For listed professions, such as legal, medical, engineering, architecture, accountancy and information technology, gross receipts up to 50 lakh rupees, or 75 lakh if cash receipts are within 5%. Income is taken as 50% of receipts, or actual profit if that's higher.
What are the limits for small businesses?
Turnover up to 2 crore rupees, or 3 crore if cash receipts are within 5%. Income is taken as 6% of turnover received through banking or online modes and 8% of the rest, or actual profit if that's higher.
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