Presumptive Taxation under Section 58 — What Replaced 44AD, 44ADA and 44AE
Quick answer: For income from 1 April 2026 (Tax Year 2026-27), presumptive taxation sits in Section 58 of the Income-tax Act 2025 (ex-44AD, 44ADA, 44AE). Business limit is ₹2 crore turnover (₹3 crore if cash receipts and payments are each 5% or less); profession limit is ₹50 lakh receipts (₹75 lakh with 5% or less cash). Deemed profit is 8% of turnover (6% on digital receipts) for business and 50% of receipts for profession. FY 2025-26 (AY 2026-27) is still 44AD/44ADA under the 1961 Act.
Last verified 17 October 2026 — figures on this page match our tax audit and section-mapping pages. We update it the day a rule changes.
Section map
| Scheme | 1961 Act | 2025 Act |
|---|---|---|
| Business presumptive | s.44AD | s.58 |
| Profession presumptive | s.44ADA | s.58 |
| Goods carriage presumptive | s.44AE | s.58 |
| Non-residents | — | s.61 |
| Tax audit | s.44AB | s.63 (Form 26) |
Limits and deemed profit (Tax Year 2026-27)
| Who | Limit | Deemed profit |
|---|---|---|
| Business | ₹2 crore (₹3 crore with ≤5% cash) | 8% of turnover; 6% on digital receipts |
| Profession | ₹50 lakh (₹75 lakh with ≤5% cash) | 50% of receipts |
Presumptive or audit? How to decide
- Turnover under the limit and profit at or above the deemed rate: presumptive filing is simple, with no tax audit.
- Profit below the deemed rate: treat as a possible audit case; check the open s.63 point before filing
- Turnover above the limit: regular books, and audit once ₹1 crore (₹10 crore with ≤5% cash) is crossed
- Opting out: leaving the scheme can carry a multi-year lock-out; we check this before you switch
What we do
- Eligibility and limit check against GST turnover and bank statements
- Presumptive vs regular-books vs audit comparison before you file
- Return filing: ITR-4 and the other ITR forms; regime choice via old vs new regime
- Advance tax planning: instalments and dates
Section numbers are quoted from the Income-tax Act, 2025 and cross-checked with our section mapping; anything not confirmed on an official page is marked and checked at filing, never estimated.
Talk to us before you file anything
Frequently asked questions
What replaced Section 44AD?
Section 58 of the Income-tax Act 2025, for income from 1 April 2026 (Tax Year 2026-27). Section 44ADA and 44AE are folded into the same section.
What is the presumptive turnover limit for business?
₹2 crore, extended to ₹3 crore where cash receipts and cash payments are each 5% or less of the total.
What is the presumptive limit for professionals?
₹50 lakh gross receipts, extended to ₹75 lakh where cash receipts are 5% or less. Deemed profit is 50% of receipts.
What profit rate applies to business?
8% of turnover, and 6% on the part received by digital or banking modes. You may declare a higher profit.
Can I declare profit below 8% under presumptive tax?
Possibly, but then the audit question arises. Many practitioners read the s.63 table as triggering audit in that case; treat it as an audit case until CBDT clarifies. See the tax audit page.
Do I need books of account under presumptive tax?
No detailed books are required for the presumptive income itself, but bank records, GST returns and turnover reconciliation should be kept, because notices usually compare GST turnover with the return.
Is the presumptive scheme available to non-residents?
Non-residents are dealt with separately in Section 61 of the 2025 Act.
Which rules apply to my FY 2025-26 return?
The 1961 Act: sections 44AD/44ADA/44AE and ITR-4 for AY 2026-27. The 2025 Act applies only from Tax Year 2026-27.