Section 44AD → Section 52
Special provision for computing profits and gains of business on presumptive basis
Quick Answer
Section 44AD of the Income Tax Act, 1961 (Special provision for computing profits and gains of business on presumptive basis) corresponds to Section 52 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 44AD
Provision Summary
Small businesses (turnover up to Rs. 2/3 Cr) can declare 8% (or 6% for digital) of turnover as profit without maintaining books.
Sec 52
Provision Summary
Retained. The enhanced limit of Rs. 3 Crores is solidified for businesses where cash receipts do not exceed 5% of total turnover.
Key Changes & Highlights
- Lock-in period of 5 years maintained. Opting out restricts re-entry for the next 5 years.
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Frequently Asked Questions
What does Section 44AD of the Income Tax Act 1961 deal with?
Section 44AD (Special provision for computing profits and gains of business on presumptive basis) Small businesses (turnover up to Rs. 2/3 Cr) can declare 8% (or 6% for digital) of turnover as profit without maintaining books.
What is the new section number for Section 44AD under the Direct Tax Code 2025?
Section 44AD of the ITA 1961 maps to Section 52 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 44AD under the new tax code?
Section 44AD is marked as "Retained" with status "Modified". Impact: Very High - Simplifies tax filing for millions of retail traders and MSMEs.
What are the key changes to Section 44AD under DTC 2025?
Lock-in period of 5 years maintained. Opting out restricts re-entry for the next 5 years.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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