Section 44AE business of playing, leasing or hiring goods carriages

Income on estimated basis in the case of taxpayers engaged in the business of playing leasing or hiring truck section 44AE is applicable, if the taxpayer is engaged in the business of playing, hiring and leasing goods carriages and he / it does not own more than 10 goods carriages at the time during the previous year. In such case, income would be calculated on estimated basis at the rate of ₹7,500 for every month (or part of a month) during which the goods carriage is owned by taxpayer. No further deduction is allowed under any other section except remuneration and interest to partner.

INCOME ON ESTIMATED BASIS IN THE CASE OF TAXPAYERS ENGAGED IN THE BUSINESS OF PLYING, LEASING OR HIRING TRUCK SECTION 44AE | BUSINESS OF PLYING, LEASING OR HIRING GOODS CARRIAGES SECTION 44AE OF INCOME TAX, 1961 | SPECIAL PROVISIONS FOR COMPUTING PROFIT AND GAINS OF BUSINESS OR PROFESSION SECTION 44AE

If the taxpayer wants to declare lower income, he will have to maintain books of account and get his account audited on compulsory basis (and in such a case, return will have to be submitted electronically with digital signature).

APPLICABLE TO

All taxpayer engaged in the business of hiring plying or leasing goods carriage.

CONDITION

Number of carriages: Taxpayer must not own more than 10 goods carriages at any time during the previous year.

Owner of carriages includes a buyer under hire purchase (HP method) or installment system even if the whole amount is unpaid.

Goods carriage behalf of any motor vehicle constructed / formed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed / formed or adapted when used for the carriage of goods;

ESTIMATED INCOME

Income from each goods carriage shall be--

• Heavy Goods Carriage: Presumptive Income (Per month or part of a month) ₹1,000 per ton of gross vehicle weight or unladen weight.

• Other Goods Carriage: Presumptive Income (Per month or part of a month) ₹7,500.

(1) Income shall be calculated from the month when taxpayer acquired the property whether it's been put to use or not.

(2) A taxpayer can declare higher income.

IMPORTANT NOTES

(1) Deduction under section 30 to under section 38: The estimated income is comprehensive and no further deductions under section 30 to under section 38 shall be allowed.

(2) Depreciation: Depreciation is deemed to have been already applicable. The written down value (WDV) of asset will be calculated, as if depreciation has been allowed.

(3) Deductions: The above estimated income is aggregated with other income of the taxpayer, from any other business or under any other heads of income. Further deduction under chapter VIA (other than those mentioned above) shall be applicable to the taxpayer as usual.

(4) Brought forward loss: Brought forward loss (if any) shall be deduct from such estimated income as per provisions of this Act.

(5) Effect if taxpayer declares lower income: A taxpayer can declare his income less than the estimated income as per provision of this section. In such case he will have to:

• Maintain books of account and other documents and account as required under section 44AA if his total income exceeds the maximum exemption limit; and

• Get his accounts audited and furnish a report of such audit as prescribed under section 44AB (irrespective of amount of gross receipts or turnover) if his total income exceeds the maximum exemption limit.

Note: taxpayer can change his option from year to year.