Computing Profits and Gains of Profession on Presumptive Basis: Clause 58 of the Income Tax Bill, 2025 vs. Section 44ADA of the Income Tax Act, 1961

Presumptive taxation for professionals deems a portion of gross receipts as taxable income, simplifying compliance but restricting deductions.

Clause 58 institutes a presumptive taxation scheme for specified resident professionals, prescribing turnover-based eligibility and deeming taxable income at a fixed proportion of gross receipts or actual profit, whichever is higher. Eligible taxpayers are generally relieved from routine accounting and audit obligations, but must maintain books and undergo audit if they claim profits lower than the presumptive amount. Deductions or losses are not permitted against the presumptive income, and depreciation is to be treated as if claimed and allowed. Certain entity types are excluded from the scheme.