Presumptive taxation under the Income-tax Act, 2025 is in the table inside section 58 — 6% on banked receipts and 8% otherwise for business, 50% for specified professions, and a per-vehicle basis for goods carriages.
The presumptive tables are not in Schedule IV. Schedule IV is read with section 11 and lists income not to be included in the total income of eligible non-residents and foreign companies. Presumptive taxation is the table inside section 58, with non-resident schemes in section 61.
One section, three schemes
The Income-tax Act, 1961 had three separate presumptive sections for residents — 44AD for eligible businesses, 44ADA for specified professions and 44AE for goods carriages. The Income-tax Act, 2025 puts all three into one table inside section 58.
Section 58(1) does the heavy lifting: the provisions of sections 26 to 54, to the extent contrary to this section, do not apply to the computation. The ordinary deduction machinery is switched off, which is the whole point of a presumptive scheme.
The non-resident presumptive schemes — sections 44B, 44BB, 44BBA, 44BBB, 44BBC and 44BBD of the old Act — are consolidated separately in section 61.
The Income-tax Act, 2025 takes effect from 1 April 2026 and applies from tax year 2026-27. The Income-tax Act, 1961 continues to govern every year up to 31 March 2026 because of the repeal and savings provision in section 536. The Schedule contents described here are taken from the Act as enacted, incorporating the corrigenda notified in the Gazette on 3 September 2025.
Where each provision actually sits
| Topic | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
| Small business presumptive | Section 44AD | Section 58 — Table serial 1 |
| Goods carriages | Section 44AE | Section 58 — Table serial 2 |
| Specified professions | Section 44ADA | Section 58 — Table serial 3 |
| Books and audit where lower profit claimed | Sections 44AD(5) and 44ADA(4) | Section 58(3) |
| Non-resident presumptive schemes | Sections 44B to 44BBD | Section 61 |
| Books of account | Section 44AA | Section 62 |
| Tax audit | Section 44AB | Section 63 |
| Advance tax in one instalment | Section 211, proviso | Section 408(2) |
The three rows of the section 58 table
Serial 1 — business, and the two turnover limits
Any business other than that in serial 2, carried on by an eligible assessee, where turnover does not exceed ₹2 crore, or does not exceed ₹3 crore where cash receipts do not exceed 5% of total turnover or gross receipts. Income is the aggregate of 6% of turnover received by specified banking or online mode — during the tax year or before the section 263(1) due date — and 8% of the balance, or the profit actually earned, whichever is higher.
Serial 2 — goods carriages
The business of plying, hiring or leasing goods carriages, where the assessee owns not more than ten goods carriages at any time during the tax year. Income is computed vehicle by vehicle, with a heavy goods vehicle at ₹1,000 per ton of gross vehicle weight and other vehicles at the rate the table specifies.
Serial 3 — specified professions
A specified profession referred to in section 62(4) — legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary — where gross receipts do not exceed ₹50 lakh, or ₹75 lakh where cash receipts do not exceed 5%. Income is 50% of gross receipts or actual profit, whichever is higher.
Section 58(3) — the cost of declaring less
An assessee who claims that profits actually earned are lower than the presumptive figure, and whose total income exceeds the maximum amount not chargeable to tax, must keep books under section 62 and get accounts audited under section 63. Both conditions must be met.
What Schedule IV actually contains
Schedule IV is read with section 11 and lists income not to be included in the total income of eligible non-residents, foreign companies and other such persons. Its serial 1 is interest for an individual resident outside India as defined in section 2(w) of FEMA, 1999, or one permitted by the Reserve Bank of India to maintain the account, on moneys standing to credit in that account.
Worked example
A trader in tax year 2026-27 with turnover of ₹2,60,00,000.
| Step | Working | Amount |
|---|---|---|
| Received through banking channels | — | ₹2,50,00,000 |
| Received in cash | 3.85% of turnover — within 5% | ₹10,00,000 |
| Eligibility limit | Cash within 5%, so ₹3 crore applies | Eligible |
| 6% on banked receipts | 6% × ₹2,50,00,000 | ₹15,00,000 |
| 8% on the balance | 8% × ₹10,00,000 | ₹80,000 |
| Presumptive income | Or actual profit, whichever is higher | ₹15,80,000 |
Had cash receipts been ₹20,00,000 — 7.7% of turnover — the ₹3 crore limit would not have applied, turnover would have exceeded ₹2 crore, and section 58 would not have been available at all. The 5% cash test is the gateway, not merely a rate difference.
Compliance checklist
- Compute cash receipts as a percentage of turnover first; it decides which limit applies.
- Split turnover between amounts received by banking or online mode (6%) and the rest (8%).
- Collect receivables through banking channels before the section 263(1) due date to bring them into the 6% limb.
- Declare the higher of the presumptive figure and actual profit.
- If declaring lower and total income exceeds the exemption limit, prepare for section 62 books and section 63 audit.
- Presumptive taxpayers pay advance tax in a single instalment by 15 March under section 408(2).
- For non-resident presumptive schemes, use section 61.
Common mistakes
- Looking for presumptive tables in a Schedule.
- Assuming the ₹3 crore limit applies without testing the 5% cash condition.
- Applying 6% to all turnover instead of only to banked receipts.
- Declaring the presumptive figure when actual profit is higher.
- Treating professional presumptive taxation as open to any profession; serial 3 is confined to section 62(4) professions.
All sixteen Schedules of the Income-tax Act, 2025
Because the numbering is widely misquoted, the full list is reproduced below from the Act as enacted. Note that Schedules II to VII are all exemption lists, split by who is claiming rather than by what the income is.
| Schedule | Read with | Subject as enacted |
|---|---|---|
| I | section 9(12) | Conditions for certain activities not to constitute business connection in India |
| II | section 11 | Income not to be included in total income |
| III | section 11 | Income not to be included in total income of eligible persons |
| IV | section 11 | Income not to be included in total income of eligible non-residents, foreign companies and other such persons |
| V | section 11 | Income not to be included in total income of certain eligible persons including investment funds, business trusts and their unit holders |
| VI | section 11 | Income not to be included in total income of certain eligible persons in an International Financial Services Centre or having income therefrom |
| VII | section 11 | Persons exempt from tax |
| VIII | section 12 | Income not to be included in the total income of political parties and electoral trusts |
| IX | section 48 | Deduction for tea, coffee and rubber development accounts |
| X | section 49 | Deduction for Site Restoration Fund |
| XI | section 2(91) | Recognised provident funds, approved superannuation funds and approved gratuity funds |
| XII | section 51 | Minerals, and groups of associated minerals |
| XIII | section 45(2) | List of articles or things |
| XIV | section 55 | Insurance business |
| XV | section 123 | Deduction for life insurance premia, contribution to provident fund, subscription to certain equity shares, etc. |
| XVI | section 350 | Permitted modes of investment or deposits by a registered non-profit organisation |
This is an explanatory guide, not tax advice, and it does not reproduce the section in full. Read the bare text of the section before you rely on it, and check for later amendments, the Income-tax Rules made under the new Act, and CBDT circulars and notifications.