Presumptive Taxation
✓ Last verified 14 Sep 2026
The short version
Presumptive taxation lets eligible small businesses and professionals pay tax on a flat, assumed percentage of turnover or receipts, instead of calculating actual profit after every expense - simpler to file, at the cost of losing itemized expense deductions.
Rather than tracking every business expense to arrive at actual profit, eligible taxpayers can declare a presumed profit percentage of their turnover or receipts and pay tax on that instead - see our article on freelance and side-gig income taxation for the exact percentages and eligibility thresholds under Sections 44AD (small businesses) and 44ADA (professionals). This genuinely simplifies bookkeeping and filing, but means giving up the ability to claim itemized expense deductions - if your real expenses are unusually high, presumptive taxation may not be the lower-tax option, worth checking both ways before opting in.
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