PRESUMPTIVE TAXATION CHECKLIST (SECTION 44AD / 44ADA)
For small businesses and professionals · FY 2025-26 (AY 2026-27) · File in ITR-4
Eligibility – 44AD (Business)
- ☐ Resident individual, HUF or partnership firm (not LLP)
- ☐ Turnover up to Rs. 2 crore (Rs. 3 crore if cash receipts ≤ 5%)
- ☐ Not engaged in commission, agency or plying / hiring of goods carriages (44AE)
- ☐ Declare profit of 8% (6% for digital / banking receipts)
Eligibility – 44ADA (Profession)
- ☐ Specified profession – legal, medical, engineering, accountancy, etc.
- ☐ Gross receipts up to Rs. 50 lakh (Rs. 75 lakh if cash ≤ 5%)
- ☐ Declare profit of at least 50% of gross receipts
Conditions
- ☐ No deduction of business expenses / depreciation separately
- ☐ Pay entire advance tax by 15 March in a single instalment
- ☐ Continue the scheme for at least 5 consecutive years (44AD)
- ☐ If opting out early, maintain books and get a tax audit for the next 5 years
Filing
- ☐ Use ITR-4 (Sugam) for presumptive income
- ☐ Report turnover, gross receipts and presumptive profit
- ☐ Add any other income (salary, interest, capital gains) separately
- ☐ Retain bank statements and turnover records
Declaring profit below the presumptive rate while income exceeds the basic exemption limit triggers a mandatory tax audit under Section 44AB; the 5-year lock-in applies to 44AD.