Taxmann Presumptive Taxation By Srinivasan Anand G. 2nd Edition April 2026

Presumptive Taxation is a comprehensive, section-wise treatise covering the entire framework of presumptive taxation as codified under the Income-tax Act 2025, read with the Income-tax Rules 2026, and as amended by the Finance Act 2026. It represents the first full-length authored commentary that reconciles the complete collapse and re-statement of the erstwhile scheme of presumptive taxation under ITA 1961 (Sections 44AD, 44ADA, 44AE, 44B, 44BB, 44BBA, 44BBB, 44BBC, 44BBD and Chapter XII-G) into two unified, table-based provisions of ITA 2025—Section 58 (residents) and Section 61 (non-residents)—alongside a re-numbered Tonnage Tax Scheme now housed in Sections 225 to 235.

The book distils the law into practical guidance through Division 5, which contains 81 FAQs and worked case studies spanning every major category of assessee and transaction type, and closes with four appendices reproducing the relevant sections of ITA 2025 and ITA 1961 and the relevant rules of IT Rules, 2026 and IT Rules, 1962 for ready cross-reference.

• Chartered Accountants, Company Secretaries, Cost Accountants and Tax Consultants advising small businesses, professionals, transporters and non-residents on presumptive taxation and associated tax audit exposure
• Tax Advocates and Litigators handling scrutiny assessments, limited scrutiny on presumptive income, Section 287 rectification proceedings, and appellate matters under the new ITA 2025 framework
• Assessing Officers, CIT(A) staff and ITAT Practitioners dealing with Section 58, Section 61 and Sections 225–235 of ITA 2025
• Small Business Owners, Retail Traders, Manufacturers, Coaching Institute Proprietors, Doctors, Lawyers, Architects, Engineers, Company Secretaries, Film Artists and Technical Consultants filing ITR-4 (Sugam) under the presumptive regime
• Goods Carriage Operators and Transport Firms availing the tonnage-per-truck regime in Sl. No. 2 of Section 58(2)
• Non-Resident Shipping, Cruise, Airline, Mineral Oil Exploration, Turnkey Power Project, and Electronic Goods Manufacturing Services/Technology Providers availing Section 61 schemes
• Indian Shipping Companies opting for, renewing, or exiting the Tonnage Tax Scheme under Sections 225–235
• Corporate Tax Teams and In-House Counsel mapping legacy Section 44AD/44ADA/44AE-linked compliance policies to the new Section 58 framework
• Diamond Trade Assessees and their Advisors, given the dedicated treatment of the 1.5%–4.5% lower rate and the Oopal Diamond precedent
• Students of CA, CS, CMA and LL.B. pursuing advanced direct taxation papers and preparing for the transition to the ITA 2025 regime
• Authors, Trainers and Faculty building curriculum content on the new Section 58 and Section 61 framework

The Present Publication is the 2nd Edition | 2026, amended by the Finance Act 2026. It is authored by CA. Srinivasan Anand G., with the following noteworthy features:

• [Complete ITA 2025 Framework] Full coverage of every presumptive taxation scheme under the Income-tax Act 2025—both resident (Section 58, six Sl. Nos.) and non-resident (Section 61, six Sl. Nos.)—together with the Tonnage Tax Scheme (Sections 225–235) for qualifying Indian shipping companies
• [Chapter-by-Chapter Comparative Analysis] Each chapter identifies every textual and substantive change from Sections 44AD, 44ADA, 44AE, 44B, 44BB, 44BBA, 44BBB, 44BBC, 44BBD and 115V–115VZC, including the new overriding effect of Section 61 over Sections 26–54 (wider than Section 44BB's override of Sections 28–41 and 43A)
• [Section 58 Table De-Constructed] Column-by-column analysis of Section 58(2)—Column B (specified business/profession), Column C (eligible/specified assessee), Column D (turnover/gross receipts thresholds of ₹2/3 crore, ₹50/75 lakh) and Column E (8%/6% and 50% computation rates)—with each column tied back to the enabling conditions and judicial tests
• [Section 61 Table De-Constructed] Parallel treatment of Section 61(2)—six non-resident business activities (shipping, cruise, aircraft, turnkey power, mineral oil, electronic goods)—with rate and rebuttable/irrebuttable characterisation summarised in a consolidated matrix
• [New Bar on Loss Set-Off] Detailed treatment of Section 58(4) and Section 61(4), which for the first time prohibit set-off of losses from any other head or business against presumptive income—a restriction that did not exist under Sections 44AD, 44ADA or 44AE of ITA 1961
• [Expanded 5-Year Lock-In and Cooling-Off] Analysis of the tighter Section 58(7) regime under which irregular exit from Sl. No. 1 now bars the assessee from availing Sl. No. 2 and Sl. No. 3 as well during the 5-year cooling-off period (under Section 44AD(4), the bar was confined to Section 44AD alone)
• [Rule 48 and CBDC Inclusion] Full treatment of the nine prescribed electronic modes under Rule 48 of the Income-tax Rules, 2026—including the newly added Tier III Full KYC Central Bank Digital Currency Wallets, P-CBDC, and Wholesale/Cross-border CBDC in clause (i)—that qualify for the lower 6% presumptive rate in place of the default 8%
• [Redefined 'Commission or Brokerage'] Dedicated analysis of Section 66(3) read with Section 402(7) of ITA 2025, which for the first time statutorily defines 'commission or brokerage' for presumptive purposes—resolving the ambiguity under Section 44AD(6) of ITA 1961 by codifying the Kotak Securities Ltd. approach
• [Section 62 and Section 63 Interplay] Clear mapping of the new book-keeping thresholds under Section 62(2)—₹1,20,000/₹2,50,000 PGBP and ₹10,00,000/₹25,00,000 gross receipts—and the tax audit triggers under Section 63(1)/(2), including the harsh new Condition 2 that brings lower-than-presumptive declarations within tax audit regardless of turnover
• [80+ FAQs and Case Studies] Division 5 contains 81 FAQs and worked case studies covering practical scenarios—builders and developers, stamp duty valuation interplay (Section 53 of ITA 2025/Section 43CA of ITA 1961), partnership firm nursing homes, coaching institutes, stamp vendors, airline agents, lottery agents, tanker hire, JCB hire, combination of proprietary practice and partnership firm receipts, Aadhaar-PAN goods carriage declarations, unexplained cash deposits (Section 104 read with Section 195 of ITA 2025, formerly Section 69A read with Section 115BBE), bogus purchase additions, and the specific disclosure requirements of ITR-4 (Sugam) for AY 2026-27
• [Diamond Trade Lower Rate] Detailed discussion of the 1.5%–4.5% presumptive rate range for diamond manufacturers and traders based on the Task Force Report of the Ministry of Commerce and Industry (February 2013) and the ITAT ruling in Oopal Diamond v. ACIT [2022] 144 taxmann.com 184 (Mumbai – Trib.), which endorses a 3% estimation for combined trading-and-manufacturing assessees
• [New 'Tax Year' Concept] Explanation of the shift from dual 'Previous Year' and 'Assessment Year' to a single unified 'Tax Year' from TY 2026-27 onwards, and the transitional handling of FY 2025-26 (AY 2026-27) under the last year of Section 44AD/44ADA/44AE
• [Scope of CA Profession] Exhaustive treatment of what does and does not constitute 'gross receipts' of a CA in practice for Sl. No. 3, covering Section 2(2) of the CA Act 1949, Regulation 191, Council resolutions on Management Consultancy Services, permitted occupations not counting as professional receipts (life insurance renewal commission, authorship of books and articles, part-time tutorship, notary work, surveyorship, etc.), and the implications for issuing valuation reports under Rule 11 and Form No. 4 certificates under Rule 12 of the Income-tax Rules, 2026
• [Medical Profession Depth] Treatment of salaried vs. independent medical practitioners applying Dr. Mathew Cherian and Sankarnaryanasamy Selvanarayanan, including anesthesiologists visiting several hospitals on monthly retainers, doctors combining salary with clinic practice, nursing home businesses and their interplay with Sl. No. 1 and Sl. No. 3
• [Tonnage Tax Scheme – Full Treatment] Chapter-length coverage of the tonnage tax framework: qualifying company and ship tests, daily tonnage income slabs, joint-operation formulas, core activities (pooling, affreightment, slot/space/joint charters, feeder services, container box leasing) vs. incidental activities, MAT book profit adjustments under Section 206(1)(c), the tonnage tax reserve account (20% of book profit, 8-year utilisation window), minimum training requirements under the Director-General of Shipping guidelines, the 49% charter-in limit, amalgamation/demerger treatment, exclusion for abuse under Section 234, and the 10-year option validity
• [Judicial Support] Liberal citation of Supreme Court, High Court and ITAT decisions including Kotak Securities Ltd. v. Dy. CIT, CIT v. Nitin Soni, The Chief Inspector of Mines v. Lala Karam Chand Thapar, Vivek Narayan Sharma v. Union of India, Banwarilal Agarawalla v. State of Bihar, Raj Kumar Shivhare v. Assistant Director (ED), CIT v. Bhagwan Broker Agency, Anandkumar v. ACIT, Krishna Kumar Agrawal v. ITO, CIT v. Vantage International Management Co., CIT v. Transocean Offshore International Ventures Ltd., CIT (International Taxation) v. Schlumberger Asia Services Ltd., State of AP v. Vasudeva Rao, CIT v. A.M. Fazil and Mukesh Vasantkumar Chandan v. ITO
• [Ministry of Finance Clarifications] Reproduction and analysis of the Select Committee clarification on single-scheme vs. business-wise option, CBDT Circulars (No. 2/2018 on cash transactions, No. 10/2017 on ICDS applicability to presumptive taxpayers), and the Finance Minister's 2017 Budget speech rationale for the reduced 6% rate
• [Statutory Appendices] Four appendices provide the relevant sections of ITA 2025 (Appendix 1), the corresponding sections of ITA 1961 (Appendix 2), the relevant rules of Income-tax Rules 2026 (Appendix 3) and the relevant rules of Income-tax Rules 1962 (Appendix 4)—a ready cross-reference pack for the transition

The book provides end-to-end coverage across five analytical divisions:

• Conceptual Foundation
  • Concept, definition, purpose and jurisprudential basis of presumptive taxation
  • Regular computation vs. presumptive computation of taxable income
  • Rebuttable vs. irrebuttable presumption—structure, proof tests, burden-shifting
  • Policy purpose of presumptive taxation—ease of doing business for SMEs, international competitiveness for shipping
  • The ITA 2025 applicability matrix across Section 58 Sl. Nos. 1, 2, 3 and Section 61 Sl. Nos. 1 to 6 covering depreciation, other deductions, loss set-off, lower-than-presumptive claim, tax audit and book-keeping.

The book is organised into five analytical divisions followed by four appendices:

• Division 1 – Concept and Purpose of Presumptive Taxation | Chapter 1 introduces the concept, distinguishes regular from presumptive taxation, defines rebuttable and irrebuttable presumption, articulates the policy purpose, and lays out the complete ITA 2025 applicability matrix in tabular form for residents and non-residents
• Division 2 – Presumptive Taxation of Business or Profession of Resident Individuals, HUFs and Firms | Chapters 2 to 8 cover: definitions of 'business' and 'profession' (Chapter 2), businesses eligible for presumptive taxation (Chapter 3), specified professions of residents (Chapter 4), resident taxpayers who can opt for presumptive taxation (Chapter 5), Sl. No. 1 scheme (Chapter 6 – 13 sub-sections), Sl. No. 2 scheme (Chapter 7 – 13 sub-sections), and Sl. No. 3 scheme (Chapter 8 – 13 sub-sections)
• Division 3 – Presumptive Taxation of Certain Business Activities of Non-Residents | Chapters 9 to 14 cover the six non-resident presumptive schemes in Section 61—shipping (Chapter 9), cruise (Chapter 10), aircraft (Chapter 11), mineral oil exploration (Chapter 12), turnkey power projects (Chapter 13) and electronic goods manufacturing services/technology (Chapter 14)—each following a uniform 12–16 sub-section template
• Division 4 – Tonnage Tax Scheme for Qualifying Indian Shipping Company | Chapter 15 covers the tonnage tax regime as now contained in Sections 225 to 235 of ITA 2025 across 21 sub-sections, from the basic tonnage income slabs through amalgamation, demerger and exclusion for tax avoidance
• Division 5 – FAQs and Case Studies on Presumptive Taxation | Chapter 16 contains 81 numbered FAQs and worked case studies
• Appendices | Appendix 1 reproduces the relevant sections of ITA 2025 (Sections 58, 61, 225–235 and related provisions); Appendix 2 reproduces the corresponding sections of ITA 1961 (44AD, 44ADA, 44AE, 44B–44BBD, 115V–115VZC); Appendix 3 reproduces the relevant rules of Income-tax Rules 2026 (notably Rule 46, Rule 48, Rule 146); Appendix 4 reproduces the relevant rules of Income-tax Rules 1962 (Rule 6F, Rule 6ABBA and related)
• Every chapter dealing with a specific presumptive provision follows a uniform analytical template that makes the book equally navigable for first-time readers and experienced practitioners, and the extensive cross-referencing between chapters and FAQs allows the reader to move seamlessly between statutory analysis and practical application