Presumptive against books
Tax year 2026-27The presumptive choice, and what follows from it
Section 58 against books for one client and one year: the tax audit on each route, the five year bar, and what the scheme costs. Runs in your browser.
Your figures
About this
The Income-tax Act, 2025 is in force from 1 April 2026, so it governs tax year 2026-27. It folds the three presumptive sections into one Table in s.58(2).
What the entry covers
Any business other than the business at Sl. No. 2. Turnover not over 2 crore, or not over 3 crore where cash receipts do not exceed 5 percent.
The conditions in s.58(11), any one of which is enough
About this
Received during the year, or before the due date for furnishing the return under s.263(1). Only this half takes 6 percent. Money that arrives later, or by any other route, takes 8.
About this
Count a cheque or a bank draft that is NOT account payee in here. s.58(9) treats it as cash, and that one line decides whether the scheme limit is 2 crore or 3.
About this
Enter it before any deduction for partner salary or interest. That is the figure the Table compares its percentage against, and the figure the books route then deducts from, so netting it off first understates both sides.
For the second limb of the s.63 cash test
About this
The ten crore limb needs both cash tests, not either. Receipts within five percent AND payments within five percent. Fail one and the limit stays at one crore, and leave the aggregate of payments empty and the limb is not made out at all, because a denominator nobody has entered is not a condition that has been satisfied.
For the two tests that turn on the exemption
About this
This one is an input because it was not verified for this page. It moves with the regime and with age. s.58(3) and s.58(8) both turn on total income exceeding it, so put your client's own figure in rather than leaving the default.
Audit under s.63
Sl. No. 1Off under the scheme
Declaring as per the Table takes s.63 off for the year, under s.63(2), at the price of ₹ 2,60,000 of income above what the books show. On books, an audit is required. The working for both is below.
01 / s.58(11), and the condition on the entry
The scheme is open to this client
Every condition the entry carries, tested on your figures, before any comparison is drawn.
| Condition | What it asks | Provision | Outcome |
|---|---|---|---|
| Resident in India | Both defined terms require residence. A non resident is outside the scheme however small the turnover. | s.58(11) | Met |
| Not a limited liability partnership | Both terms read firm other than a limited liability partnership, so an LLP is outside the scheme on either entry. | s.58(11) | Met |
| Not a company | Neither term reaches a company. An eligible assessee is an individual, a HUF or a firm other than an LLP; a specified assessee is an individual or such a firm. | s.58(11) | Met |
| Earns no commission or brokerage | An eligible assessee does not earn income in the nature of commission or brokerage. Any such income takes the whole business out of the entry. | s.58(11) | Met |
| Carries on no agency business | An eligible assessee carries on no agency business. This is a separate condition from the commission one and is failed on its own. | s.58(11) | Met |
| Carries on no specified profession | An eligible assessee does not carry on a specified profession. A professional belongs on the profession entry, not on the business one. | s.58(11) | Met |
| Has claimed no competing deduction | An eligible assessee has not claimed a deduction under Chapter VIII-C for the year. Claiming one takes the whole business out of the entry, however far inside the turnover limit it is. | s.58(11) | Met |
| Turnover within the limit | Two crore, or three crore where cash receipts do not exceed five percent of turnover. | s.58(2), Sl. No. 1 | Met |
The limit on turnover
base limb₹ 2,00,00,000
₹ 10,00,000 of cash is 7.15% of turnover, above the five percent the raised limit asks for, so the limit stays at ₹ 2,00,00,000. The figure is inside it.
How the cash test moves the limit
The higher limit is not a second threshold you reach by growing into it. It is the same threshold read differently where the cash test is satisfied, so a client at ₹ 3,00,00,000 of turnover is inside the scheme on one cash figure and outside it on another, with nothing else changed.
s.58(9) is the part that is easy to read past. A cheque or a bank draft that is not account payee counts as cash for this test, so a client who takes nothing in notes can still fail it on bearer instruments, and the failure costs the raised limit for the whole year.
02 / s.58(2), Sl. No. 1, the computation and the comparison
The percentage is a floor, not a rate
Every row of the Table ends with the profit actually earned, whichever is higher. The percentage is the least that may be declared and not the amount.
| Line | Base | Rate | Amount |
|---|---|---|---|
| Turnover received by a specified banking or online modeSl. No. 1, limb (A)(i). Received during the year, or before the due date for furnishing the return. | ₹ 1,30,00,000 | 6% | ₹ 7,80,000 |
| The rest of the turnoverSl. No. 1, limb (A)(ii). Everything not received by a specified banking or online mode in time. | ₹ 10,00,000 | 8% | ₹ 80,000 |
| The Table figure | ₹ 8,60,000 | ||
| Profit actually earned under books | ₹ 6,00,000 | ||
| Whichever is higher | ₹ 8,60,000 | ||
| Line | Under books | Under the Table |
|---|---|---|
| Profit from the activity | ₹ 6,00,000 | ₹ 8,60,000 |
| Less partner salary and interest | ₹ 0 | ₹ 0 |
| Income from the activity | ₹ 6,00,000 | ₹ 8,60,000 |
| Income under every other head | ₹ 2,00,000 | ₹ 2,00,000 |
| Total income | ₹ 8,00,000 | ₹ 10,60,000 |
The Table figure of ₹ 8,60,000 is above the ₹ 6,00,000 the books show, so it is the Table figure that is deemed. Declaring the books figure instead is claiming lower profits, which is what s.58(3) is about and what the audit section below turns on.
Why total income is struck
Where the books profit is above the percentage the scheme declares the books profit, which is why the choice so often costs no tax at all and is still worth making, or worth refusing, on everything else.
Total income is the figure two of the consequences below turn on, which is why it is struck here and not left implied. It is the activity income on each route plus whatever you entered for the other heads.
03 / s.63 and s.63(2)
The audit is the part the choice actually decides
s.63(2) says the audit section does not apply where the profits declared are as per the Table.
Which way the choice turns it
The entry is open to this client, so declaring at or above the deemed figure switches the audit off whatever the turnover, and that is usually worth more than the tax on either side of the comparison. The other direction is s.58(3): declaring below the Table figure switches it back on where total income exceeds the amount not chargeable to tax.
The tax audit calculator takes the audit question on its own, with the cash tests and what a late report costs.
On the books route
one crore limbAudit required
₹ 1,40,00,000 of turnover is above the ₹ 1,00,00,000 the one crore limb sets, so the audit is attracted on the monetary test alone. The profit claimed is below the Table figure and total income of ₹ 8,00,000 is above the ₹ 4,00,000 not chargeable to tax, so s.58(3) requires books and an audit in its own right.
On the Table route
s.63(2)No audit required
Declaring as per the Table means the profits declared are as per the Table, which is exactly the condition in s.63(2), and the audit section then does not apply for the year. It is off even at ₹ 1,40,00,000, which is over the limit that decides the books route.
s.58(3) and s.58(8) turn on total income exceeding ₹ 4,00,000, the maximum amount not chargeable to income-tax as entered in the inputs. That figure was not verified for this page and moves with the regime and with age, so put your client's own in before relying on the audit answer.
Neither limb is satisfied. Cash receipts are 7.15% of receipts and cash payments are 12.5% of payments, both above five percent, so the limit stays at ₹ 1,00,00,000. Both would have to come inside five percent to lift it, not one of them.
What that figure decides, and an audit under another law
Two of the consequences on this page turn on total income exceeding the maximum amount not chargeable to income-tax, and that figure is an input here rather than a finding: ₹ 4,00,000 as you have set it. It moves with the regime and with age, and it was not verified for this page. s.58(3) uses it to decide whether claiming below the Table figure requires books and an audit, and s.58(8) uses it again in the barred years. Put your own figure in the box before you read either answer.
Where the accounts are already required to be audited under any other law, that audit suffices for this purpose on two conditions: it is done before the specified date, and the report is furnished by it. Both, not the first alone. That is a saving in the audit section itself, it does not depend on anything above, and it is worth checking before a second audit is arranged.
04 / s.58(7) and s.58(8)
Going in is a five year decision
Declare under this entry, and then declare otherwise in any of the five tax years that follow, and the scheme is shut for five tax years after the year the profit was not declared.
What the bar carries with it
That is s.58(7). It is not a penalty on the year you left; it is a bar on the five that come after it.
s.58(8) follows it. Where the bar is running and total income exceeds the amount not chargeable to tax, books and an audit are required for those years. So a client who leaves the scheme early can end up carrying the audit they went into the scheme to avoid, for longer than the year they left.
The bar under s.58(7)
Nothing in force
Nothing is barred yet. The bar needs an earlier declaration under this entry followed by a year in which the profit is not declared under it.
Nothing is in force, because nothing was declared before. Declare under this entry for 2026-27 and the window opens: leaving the scheme in any year from 2027-28 to 2031-32 would shut it for the 5 tax years after the year you left.
05 / s.58(4), s.58(5) and s.58(6)
The deduction side, which the comparison hides
Why a client whose presumptive figure looks cheap can still be worse off under it.
Four things the scheme does to the deduction side
The two income figures above are struck before any of this.
s.58(4)
No loss, allowance or deduction
No loss, allowance or deduction is set off against presumptive income, with one exception the section makes for itself: s.58(5) keeps partner salary and interest, and only on the goods carriage entry. Everything else is inside the percentage already, so the deductions a books computation would take are spent whether or not they were incurred. A bad year is the case to watch: the percentage does not fall with the margin.
s.58(6)
The block is written down anyway
Written down value is computed as if depreciation had been claimed and allowed. Going presumptive does not preserve the block for later. The charge is notional, the reduction is real, and a client who comes back to books in three years comes back to a block that has been written down through all of them.
The depreciation calculator works the block for one assets.58(5)
Partner salary and interest is not deductible
The deduction is kept for the goods carriage entry and for neither of the others. A firm on this entry declares the presumptive figure gross of partner remuneration.
s.58(7)
Five years, not one
Leaving the scheme inside the window shuts it for the 5 tax years after the year you left, and s.58(8) can put books and an audit on those years. Section 04 works out the dates on your figures.
These are consequences of the scheme, not of this page. Read them against the client rather than in the abstract. Where there is no block of assets and no partner remuneration, the first three take very little away; where there is a live block and a firm deed, they can take away more than the comparison above shows.
06 / One client at a time
The hard part is the cash figure
The thresholds that move on this page move on one number: how much came in, and went out, in cash. Where the answer is an audit, OptiReports prepares the tax audit report from the client's Tally books.
Nothing leaves this page
Every figure is computed in your own browser as you type. The numbers are never sent to us, never stored and never logged. There is no email box in the way of the result, no account, and nothing to unlock. Close the tab and the working is gone.
A client's turnover, cash position and profit are confidential. A calculator that keeps them for a mailing list is not one you should be typing them into.
Assumptions and basis
What this calculator applied
- Law applied
- Tax year 2026-27, Income-tax Act, 2025, as amended by the Finance Act, 2026
- Rates checked
- Checked on 19 September 2026
23 notes on how the law was applied
- The Income-tax Act, 2025 is in force from 1 April 2026, so it governs tax year 2026-27. The Act replaces the previous year and the assessment year with a single tax year, which is why no assessment year is named above. FY 2025-26, being filed now, is still under the Income-tax Act, 1961.
- s.58 consolidates the three presumptive sections of the 1961 Act into one Table: Sl. No. 1 was s.44AD, Sl. No. 2 was s.44AE and Sl. No. 3 was s.44ADA. s.62 was s.44AA and s.63 was s.44AB. The 1961 numbering is carried beside each so an older working ties line for line.
- The definition of an eligible assessee has ONE deduction condition and not two. As enacted, s.58(11)(a) named both a deduction under s.144, the special economic zone deduction that was s.10AA of the 1961 Act, and a deduction under Chapter VIII-C. The Finance Act, 2026 s.40 omits the s.144 sub-clause with effect from 1 April 2026, which is the date the Act itself comes into force, so that condition never operated in any tax year. This page states Chapter VIII-C alone. A working or a checklist that still asks about s.144 is reading the first edition of the bare law.
- The due date is named here as s.263(1) and is not computed. Note before you compute one elsewhere: the Finance Act, 2026 s.66(a) SUBSTITUTED s.263(1)(c), and the substituted table carries a row the bare Act does not. A business or profession whose accounts are not required to be audited is now due on 31 August, not 31 July. The specified date for the audit report under s.63(5)(a) is one month before the due date, so a stale July date moves that too.
- Which source was read for what. The Finance Act, 2026 is the operative amending Act and is read for every amendment named on this page. The ICAI revised edition of April 2026, which consolidates that Act with its amendment footnotes, is what s.58, s.62 and s.63 were re-checked against. The first edition of September 2025 is what the original reading was taken from and is superseded on s.58(11)(a): it still carries the s.144 condition that the Finance Act, 2026 omitted from the date of original enactment. Read the first edition alone and you will apply a condition that never operated.
- This page works out the CONSEQUENCES of the choice, not the tax on it. There is no slab, no surcharge and no cess anywhere in it, and no Finance Act has been read for any rate. It takes the income under each route and reports what follows: the audit under s.63, the bar under s.58(7), and what s.58(4), s.58(5) and s.58(6) do to the deduction side. Compute the tax itself separately.
- The maximum amount not chargeable to income-tax is an INPUT here and was not verified for this page. Two consequences turn on it: s.58(3), which requires books and audit where the profit claimed is below the Table figure and total income exceeds that amount, and s.58(8), which does the same in the barred years. The figure moves with the regime and with age. Put your client's own in and check it.
- The deemed figure is a FLOOR, not a rate. Every row of the Table ends with the profit actually earned, whichever is higher, so where the books profit is above the percentage the two routes declare the same income and the choice is about the consequences alone.
- s.58(9) treats a cheque or a draft that is NOT account payee as cash for the business and profession entries. That reaches the five percent test which lifts two crore to three and fifty lakh to seventy five, so a client who banks every rupee can still fail it. Count those instruments in the cash figure you enter.
- The ten crore limb of s.63 needs BOTH tests: cash receipts within five percent of receipts AND cash payments within five percent of payments. One of them on its own lifts nothing, and the limit stays at one crore.
- The payments test needs a payments figure. Leave the box empty and this page does NOT treat the test as passed: a nil denominator has no five percent of anything, and reading an unanswered question as a satisfied condition would hand over the ten crore limb and take the audit off on figures nobody entered. Enter the aggregate of payments for the year, or read the limit as one crore.
- Cash is not a specified banking or online mode, so the cash receipts you enter should sit inside the half of the turnover that was NOT received by such a mode. Where the cash figure is larger than that half, the two boxes contradict each other: part of the turnover on which this page is charging six percent is money the same form calls cash. This page reports the contradiction and changes neither figure, because neither can be adjusted without inventing one. Split the turnover again before you read the six percent line.
- The five percent receipts test in s.63 is measured against the aggregate of amounts received, which can be wider than turnover. This page measures it against the turnover or gross receipts you enter. Where there are receipts outside turnover the denominator here is too small, the ratio too high, and the page is more likely to put you on the one crore limb than the section is. That errs towards an audit rather than away from one.
- The five year bar attaches to the business entry and to nothing else. The profession entry carries no bar, so a professional who declares presumptively one year and on books the next is not shut out of the scheme.
- s.58(5) gives the deduction to a firm, and whether an LLP is a firm for this purpose is NOT settled by the text read for this page. What is in the text is that the exclusion of an LLP sits in s.58(11), which defines the two assessee terms used by the business entry and the profession entry, and the goods carriage entry is expressed by neither of them. So this page lets an LLP on that entry enter the figure and take the deduction, and flags the question as open rather than refusing on an exclusion that is not in the row. Settle it before you file.
- s.58(10) excludes the goods carriage BUSINESS from the books and audit sections, and the Table admits that entry only to a person who owns not more than ten goods carriages at any time in the year. A larger fleet is not carrying on the business the row describes, so this page does not give it the exclusion: it applies the ordinary s.63 test on turnover instead. A transporter above the limit is in the same position as any other business of that size.
- Partner salary and interest is deductible against presumptive income for the goods carriage entry only, under s.58(5). It is not deductible on the business entry or the profession entry, and a firm that is used to taking it should price that in. Where it is allowed, s.35(e) caps it and this page does not compute the cap: the amount you enter is taken as given and is capped only at the profit, so that it cannot manufacture a loss.
- The profit actually earned should be entered BEFORE any deduction for partner salary or interest, because that is the figure the Table compares its percentage against and the figure the books route then deducts from. Entering a profit already net of remuneration understates both sides.
- This page models ONE business or profession. Where your client has more than one, the receipts of each are aggregated for the s.63 limits, the entries can differ between them, and the position has to be worked across all of them rather than read off a single activity.
- s.58(10) takes the goods carriage business outside the books and audit sections and excludes its receipts from their monetary limits. Where that client also has other activity, the other receipts are still tested, and the carriage receipts drop out of that computation. This page does not model the second activity.
- There is one case where the Act points both ways: a goods carriage assessee declaring BELOW the deemed figure. s.58(3) sends them to the books and audit sections, and s.58(10) says those sections do not apply to that business. This page reports the audit as required and names both provisions, which is the conservative direction. Settle it on the text before you rely on either reading.
- Total income here is the business or professional income under the route chosen plus whatever you enter for every other head. Deductions reduce total income and are yours to net off in that box. Get it wrong and the two tests that turn on the exemption move with it.
- Nothing here is a return, a certificate or advice. It is a working you can tick against your own.
This is a working estimate, not advice, and it will not cover every case. Rates and thresholds change. Check the figure against the law as it stands before you rely on it or sign anything. All calculators