Section 58 of the Income-tax Act, 2025 — Presumptive Taxation for Business, Profession & Goods Carriage (44AD/44ADA/44AE Successor)

In plain language

What Section 58 is about

Section 58 of the Income-tax Act, 2025 (effective from 1 April 2026, i.e. Tax Year 2026-27) is the single, consolidated presumptive taxation provision. It merges the three old sections of the Income-tax Act, 1961 — 44AD (small business), 44ADA (professionals) and 44AE (goods carriage / transport) — into one section that uses a table with three serial numbers. The idea of presumptive taxation is simple: instead of maintaining full books of account and computing actual profit, an eligible small taxpayer declares a fixed percentage (or fixed amount) of turnover as income and pays tax on that. It reduces compliance for small businesses and professionals.

Who it applies to (eligible persons)

• Business (Sl. 1, old 44AD): A resident individual, HUF or partnership firm. LLPs are excluded. It is also not available to those earning commission/brokerage, running an agency business, or the specified professionals covered separately.
• Goods carriage (Sl. 2, old 44AE): Any person who owns not more than 10 goods carriages at any time during the year (including hire-purchase/instalment vehicles).
• Profession (Sl. 3, old 44ADA): A resident specified professional — legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, and other notified professions such as company secretary, film artists and authorised representatives.

Turnover / receipt limits and rates

• Business: turnover up to ₹2 crore, extended to ₹3 crore where cash receipts do not exceed 5% of total receipts. Deemed income is 6% of turnover received through banking / online mode and 8% for cash and other modes.
• Profession: gross receipts up to ₹50 lakh, extended to ₹75 lakh where cash receipts are 5% or less. Deemed income is 50% of gross receipts.
• Goods carriage: for heavy goods vehicles (over 12,000 kg) — ₹1,000 per tonne of gross vehicle weight, per month or part of month, per vehicle; for other vehicles — ₹7,500 per month or part of month per vehicle.

Higher of presumptive or actual: In every category you must declare the presumptive figure or your actual profit, whichever is higher. You cannot declare less than the presumptive amount and still enjoy the scheme.

Key conditions and consequences

• No further deductions: once you opt in, all business expenses, depreciation and losses are deemed already allowed — you cannot separately claim them against this income. However, Chapter VIII-C / 80-type deductions (like 80C, 80D) under the old-regime equivalents remain available.
• Partnership firms: under the 2025 Act, deduction for partners' remuneration and interest is generally not allowed separately on top of presumptive income (a change from the earlier 44AD practice — verify with the final rules for your situation).
• 5-year lock-in (business only): if an eligible business assessee opts in and then declares income below the presumptive rate in any of the next 5 years, they are barred from the scheme for 5 consecutive years and must maintain books and get audited. This lock-in applies to the business category; the goods-carriage category does not carry the same lock-in.
• Audit trigger: if you declare income lower than the presumptive amount and your total income exceeds the basic exemption limit, you must maintain books of account and get them audited.
• Advance tax: business presumptive taxpayers can pay their entire advance tax in one instalment by 15 March.

How it interacts with other provisions

Section 58 sits alongside the general profit computation rules and the tax-audit provisions of the 2025 Act. It overrides the normal expense-deduction sections while you are in the scheme. Because deemed income is a proxy for real profit, you still file your return (business and professional income) and can claim the standard personal deductions available under the applicable regime.