Business Income 44AE Data Feeding

Zen IT || Business Income 44AE Data Feeding

Section 44AE Of Income Tax Act
According to Section 44AE of the Income Tax Act, small businesses engaged in the business of plying, hiring, or leasing goods carriages, and who own up to ten goods carriage vehicles, have the option to adopt the Presumptive Taxation Scheme. This scheme allows them to determine their taxable income for a specific financial year based on a prescribed rate per vehicle, simplifying the tax calculation process for eligible businesses.

Applicability of Section 44AE
Section 44AE of the Income Tax Act offers a straightforward way for certain businesses to calculate their taxable income. It's particularly useful for small businesses involved in hiring, plying, or leasing goods carriages.
This provision benefits various types of taxpayers, including partnership firms, individuals, Hindu Undivided Families (HUFs), and other entities. By opting for this scheme, eligible businesses can simplify their tax calculations and reduce administrative burdens.
Section 44AE streamlines the tax process, allowing small businesses to focus more on their core operations and growth strategies.

Calculating Presumptive Income Under Section 44AE
The net taxable income under Section 44AE is determined using a monthly rate of Rs 7,500 per vehicle for each month, including any part of the month during which you owned the vehicle in the preceding financial year. This calculation method applies uniformly to both light vehicles (gross weight up to 12 metric tons) and heavy goods vehicles (gross weight exceeding 12 metric tons).
According to the provisions of Section 44AE, even a partial month during which you owned the goods carriage will be considered as a complete month for income calculation purposes.
The income derived from this calculation represents your net taxable income, and no deductions for expenses are permissible under this scheme.

Businesses Opting for Section 44AE
When reporting Income from Business in ITR-3 or when opting for the Presumptive Taxation Scheme under Section 44AE in ITR-4, please select the appropriate code from the provided list.

Renting of Machinery

Sub Sector

Code

Renting of land transport equipment      

08001

Transport & Logistic Services

Sub Sector

Code

Packers and movers

11002

Freight transport by road

11008

Forwarding of freight

11010

Receiving and acceptance of freight

11011

Cargo handling

11012

Other Transport and Logistics services n.e.c

11015

 

Data Entry Process for Section 44AE Software
Step 1: Navigate to Transactions → Business and Profession Income.

      
Step 2: Under "Presumptive", select "44AE" and then click on "Add".

      
Step 3: Enter the relevant data into the respective columns and click "Save".

Note: The software automatically determines the number of vehicles based on the income generated by each vehicle.
Choose the vehicle type from the dropdown menu for accurate reporting.

For Light goods carriages
For vehicle type 1,
No. of goods vehicles X No. of months X 7500
Or, Actual profit
Whichever is higher, are income of 44AE

Example:
No of goods vehicle – 1, No of month - 12, Profit – 200000, Turn over – 1000000, Tonnage capacity of vehicle (In Tons) – 2
Deemed profit details:
1 light vehicle(s) For 12 months (1*12*7500) = 90000
Actual Profit Details:
1 light vehicle(s) For 12 months = 200000
Higher as assessable profit = 200000

No of goods vehicle – 1, No of month – 5, Profit- 20000, Turnover – 200000
Deemed profit details:
1 light vehicle(s) For 5 months (1*5*7500) = 37500
Actual profit Details:
1 light vehicle(s) For 5 months 20000
Higher as assessable profit = 37500
Total business income of 44AE = 200000 + 37500 = 237500.

For Heavy goods carriages
For vehicle type 1,
Tonnage capacity of vehicle (in MT) X No. of months X 1000
Or, Actual profit
Whichever is higher, are income of 44AE

Example:
No of goods vehicle – 1, No of month – 12, Profit – 500000, Turnover – 5000000, Tonnage capacity of vehicle (In Tons) – 20
Deemed Profit Details:
1 Heavy vehicle(s) For 12 months (20*12*1000) = 240000
Actual Profit Details:
1 Heavy vehicle(s) For 12 months = 500000
Higher of assessable Profit = 500000

No of goods vehicle – 1, No of month - 5, profit – 50000, turnover - 500000, Tonnage capacity of Vehicle (In Tons) – 20
Deemed Profit Details:
1 Heavy vehicle(s) For 5 months (20*5*1000) = 100000
Actual Profit Details:
1 Heavy vehicle(s) For 5 months = 50000
Higher of assessable profit = 100000
Total income of 44AE = 500000 + 100000 = 600000

I hope this provides a comprehensive understanding of how data is entered for business operations under Section 44AE.

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