1. Who Can Opt for Section 44AE?

As per Section 44AE(1) of the Income Tax Act, 1961, the presumptive taxation scheme applies to:

✅ Eligible Assessees:

• Individuals

• Hindu Undivided Families (HUFs)

• Partnership firms (excluding LLPs)

• Companies

✅ Eligible Business:

• The assessee must be engaged in the business of plying, hiring, or leasing goods carriages.

✅ Vehicle Ownership Limit:

• The taxpayer must not own more than 10 goods vehicles at any time during the previous year.

2. Who is NOT Eligible for Section 44AE?

🚫 The following categories are NOT eligible for Section 44AE:

1. Persons owning more than 10 goods vehicles at any time during the financial year.

2. Limited Liability Partnerships (LLPs) – Since Section 44AE applies only to individuals, HUFs, firms (excluding LLPs), and companies, LLPs cannot opt for this scheme.

3. Businesses other than plying, hiring, or leasing goods carriages.

4. Taxpayers who wish to declare lower income than the prescribed presumptive income – They must maintain books of account under Section 44AA and get an audit under Section 44AB, if applicable.

Requirement to Maintain Books of Account & Audit

📌 Case 1: If Income Declared is 50% or More
✅ No requirement to maintain books of account under Section 44AA.
✅ No requirement for tax audit under Section 44AB.

📌 Case 2: If Income Declared is Less Than 50%
❌ Books of account must be maintained as per Section 44AA.
❌ Audit under Section 44AB is required if total income exceeds the basic exemption limit (₹2.5 lakh/₹3 lakh/₹5 lakh as per age category).

No, you cannot claim additional deductions for business expenses like rent, salary, office expenses, etc., when opting for the presumptive taxation scheme under Section 44ADA.

✅ As per Section 44ADA(2), the 50% of gross receipts deemed as income already accounts for all expenses related to the profession.

🚫 Depreciation under Section 32 is NOT allowed separately.
✅ However, the written-down value (WDV) of assets will be considered after reducing deemed depreciation.

What Deductions Are Still Allowed?

✅ Deductions under Chapter VI-A (like 80C, 80D, 80G, etc.) CAN be claimed.

✅ Some common deductions that can be claimed separately:

• Section 80C: Investments in PPF, ELSS, Life Insurance Premium, EPF, etc. (Max ₹1.5 lakh)

• Section 80D: Medical insurance premium paid for self & family (up to ₹25,000/₹50,000 for senior citizens)

• Section 80E: Interest on education loan

• Section 80G: Donations to charitable institutions

• Section 80TTA: Interest on savings bank account (up to ₹10,000)