Sec. 44AE of Income Tax Act, 1961

[Rajan Kumar and associates]

Whether a person doesn't own Motor Vehicle, but having the same on hire/lease. is he eligible to opt Presumptive Taxation u/s 44AE?

[TANAY GHILDIYAL]

When we read Section 44AE which is a special provision for the transport and goods carriage operators. The section specifically states that any person who is in the business of Hiring, plying and leasing of goods carriage have the option to file their income tax return under this section subject to theperson owns 10 or less than 10 vehicle. Therefore any person who owns more than 10 vehicles automatically falls out the ambit of Section 44AE. This explanation is with respect to the relevance of the vehicle you own and the impact on the section 44AE by owning such vehicles.

When it comes to the question of ‘Whether ITR U/s. 44AE can be filed without owning any goods carriage” . The answer is subjective. Though the section starts with the lines “Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, who owns not more than ten goods carriages………..” the intention of the legislature is to ease the filing of the return of income for traders engaged in the business of Hiring . leasing or plying of vehicles. Thus even though you do not own any vehicle but lets say you take vehicle on lease and carry on the business then you can avail the benefit of section 44AE.

But on strict interpretation of the section , it specifically mention that “any persons who OWNS not more than ten goods carriages …….“ thus in this case though you provide the similar services but since you do not own the vehicle , you will fall under the general provision and would not be eligible for filing of return U/s. 44AE.

The solution depends on the facts of the case and I would rather suggest you to go by normal provision rather than 44AE to file the ITR.

 

Tanay Ghildiyal

9873938771 

[Rajan Kumar and associates]

Thanks for your valuable reply. But in the Form ITR-3 we have to declare in S. No. 63 "Registration No. of the Goods Carriage" then "Whether Owned/Leased/Hired". That where my query arises. 

AI Summary

Presumptive taxation under section 44AE: eligibility hinges on ownership versus leased or hired goods carriages. Whether a taxpayer in hiring, plying or leasing of goods carriages may use the presumptive taxation regime depends on the statutory ownership requirement: a strict textual reading limits the benefit to those who 'own' goods carriages, excluding operators using only leased or hired vehicles, while a purposive reading would permit businesses carrying on the activity with leased or hired vehicles to elect the presumptive scheme; ITR-3 disclosure requirements (registration and Owned/Leased/Hired) create practical uncertainty.