Section 44E of Income Tax - Presumptive Taxation Scheme for plying, hiring or leasing of goods carriages

Presumptive Taxation Scheme u/s 44E of Income Tax Act is applicable to the owner of goods carriage who owns not more than 10 goods carriage at any time during the year.

1 Applicability of the Scheme

This scheme of presumptive taxation applies to any goods carriage owner who owns not more than 10 goods carriages during any time in the Financial year.

Thus this scheme does not apply to owners of goods carriages having more than 10 goods carriages during any time of the year.

It does not depend on whether the owner is an Individual, HUF, Firm, or Company. Any person is eligible under this scheme subject to the condition that the carriage of the goods owned by it is not more than 10 during the year.

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2 Types of Goods Carriage

There are two types of Goods carriage :

(a) Heavy Goods carriage

Any Goods carriage, the gross vehicle weight of the same is above 12000 Kgs. is considered as Heavy Goods carriage.

(b) Any Goods carriage other than Heavy Goods carriage

Any Goods carriage other than heavy goods carriage is termed as Light goods carriage

3 How the Profits are deemed under this scheme 44AE

(a) In the case of Heavy Goods Carriage

The Profits are deemed to be Rs.1000 per ton of gross vehicle weight or unladen weight for every month or part of the month during which the vehicle is owned by the assessee during the year or actual profit earned, whichever is higher.

(b) In case of Other Goods Carriage

The Profits are deemed to be Rs.7500/- per month or part of the month during which the vehicle is owned by the assessee during the year or actual profit earned, whichever is higher.

No other deductions or expenses are allowed from the deemed profits calculated above.

However, in the case of the Firm, the interest and remuneration paid to partners is allowed from the profits calculated above.

4 Provisions of Audit if the profits are not declared as above

If any assessee does not declare the profits as per the deeming provisions stated above, then it will be required to get the books of accounts audited as per section 44AB of the Income Tax and all the provisions of tax audit will apply.

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