What is presumptive taxation scheme Presumptive taxation scheme can be used by businesses having a total turnover of less than Rs2 crore and eligible professionals with gross receipts of less than Rs50 lakh in a financial year Last Published: Thu, Jun 07 2018. 01 35 PM IST

Presumptive taxation scheme (PTS) allows you to calculate your tax on an estimated income or profit.

The scheme can be used by businesses having a total turnover of less than Rs2 crore and eligible professionals with gross receipts of less than Rs50 lakh in a financial year. Those who adopt PTS to file their returns are not required to maintain books of accounts.

Under PTS, the eligible businesses can estimate their net income at the rate of 6% of the total turnover, if gross receipts are received through digital mode of payments or at the rate of 8% in case of cash receipts. However, the assessee is allowed to willingly declare income at a higher rate than the minimum of 6-8% of the total turnover.

Professionals who are governed or regulated by an institute or body such as doctors, lawyers, architects, interior designers and others can adopt PTS. For them, 50% of the total receipts during the fiscal will be considered as profit and get taxed accordingly. A professional can voluntarily declare the income at a higher rate than mandatory 50% of the total receipts.

First Published: Thu, Jun 07 2018. 01 35 PM IST Livemint Ashwini kumar Sharma