GENERAL KNOWLEDGE

Detailed explanation-1: -The presumptive taxation scheme of section 44AD can be opted by the eligible persons, if the total turnover or gross receipts from the business do not exceed Rs. 2, 00, 00, 000. In other words, if the total turnover or gross receipt of the business exceeds Rs. 2, 00, 00, 000 then the scheme of section 44AD cannot be adopted.

Detailed explanation-2: -Presumptive taxation for businesses is covered under section 44AD of the income tax act. Any business which has a turnover of less than Rs 2 crore can opt to be taxed presumptively. They must declare profits of 8% for non-digital transactions or 6% for digital transactions, whichever one is applicable.

Detailed explanation-3: -As provided in section (5) of 44AD the eligible assessee who claims to be taxed on presumptive basis is not required to maintain books of account as provided in section 44AA. If the turnover is below Rs. 2 crores and opting for sec 44AD, audit u/s 44AB is not required.