Benefits of presumptive computation of profits

• Exemption from the compliance burden of maintaining books of accounts.
• Exempted from payment of advance tax and allowed to pay their entire tax liability before the due date of filling the return or actual date of filing their return whichever is earlier.

Issues related to presumptive computation of profit

• An Eligible assesse is allowed to declare profits in excess of the deemed profit;
• If an Eligible person wants to declare profit, lower than the deemed profit prescribed under section 44AD or 44ADA of the Act, then he is required to get his accounts audited in accordance with Income-tax Act, 1961.
• An eligible assesse needs to declare profit under section 44AD/44ADA of the Act for 5 consecutive years , otherwise needs to get accounts audited under section 44AB irrespective of turnover.
• An eligible assessee needs to declare profit under section 44AD for 5 consecutive years, or he loses the benefit of presumptive taxation for the subsequent 5 years.