Presumptive Taxation 2026

Presumptive taxation allows taxpayers to pay tax on a fixed percentage of income without calculating actual profits or deducting expenses, making filing simple and convenient.
OPEN FD
Presumptive Taxation 2025
OPEN FD
4 min
17-April-2026

Ease your tax filing with the Presumptive Taxation Scheme (PTS). Designed for small businesses and professionals, this scheme lets you declare income at a fixed rate without maintaining complex books of accounts—making tax compliance faster, simpler, and stress-free.

What is Presumptive Taxation in India?

The Presumptive Taxation Scheme was introduced to reduce the compliance burden for small taxpayers. Instead of maintaining detailed records, eligible individuals can declare income as a fixed percentage of turnover or gross receipts.

It ensures convenience while promoting honest reporting of profits—making tax filing simpler for businesses and professionals.

While PTS helps reduce tax-related stress, you can also simplify your investments with Bajaj Finance Fixed Deposits, offering assured returns of up to 7.30% p.a. for senior citizens and flexible tenures from 12 to 60 months. Open FD.

Key takeaways

  • Higher Turnover Limits: More businesses and professionals can now opt in.
  • Transparent Profit Reporting: Actual profits must be disclosed if higher than the presumptive rate.
  • Balanced Compliance: Maintains simplicity while preventing misuse.
  • Reduced Tax Disputes: Clearer rules mean fewer conflicts with authorities.
  • Boost to Digital Payments: Lower rates on digital receipts encourage cashless transactions.

Fixed Deposit

  1. Trusted by over 5 lakh customers
  2. Fixed Deposits worth more than Rs. 50,000 crore booked
  3. Rated CRISIL AAA/STABLE and [ICRA]AAA(STABLE)
  4. Up to 0.35% p.a. extra interest offered for senior citizens
  5. Flexible interest payout options available - Monthly, Quarterly, Half-yearly, Annually or at Maturity

By proceeding, you agree to our Terms and Conditions

What is presumptive taxation scheme (PTS)?

The Presumptive Taxation Scheme (PTS) is an alternative taxation method for small taxpayers, freelancers, and professionals, where income is declared at a prescribed rate without maintaining detailed books of accounts. It simplifies tax compliance, reduces paperwork, and is applicable if turnover or gross receipts fall within specified limits under the Income Tax Act.

Eligibility:

  • Businesses with turnover up to Rs. 3 crore under Section 44AD.

  • Professionals with gross receipts up to Rs. 75 lakh under Section 44ADA.

Tax Computation:

  • Businesses: Declare 6% (digital) or 8% (cash) of turnover.

  • Professionals: Declare 50% of receipts as taxable income.

For taxpayers seeking low-risk, steady returns, Bajaj Finance FDs act as a perfect complement—offering fixed earnings unaffected by market volatility. Invest now and earn up to 7.30% p.a. returns. Open FD.

Also Read: Taxation Meaning

Income Tax Bill 2026: Clarity on presumptive taxation

The New Income Tax Bill 2026 removes ambiguity around Sections 44AD and 44ADA.

  • Taxpayers must now declare either 6%/8% of turnover (as applicable) or actual profits, whichever is higher.

  • This change aligns declared income with real earnings and ensures transparency.

Why is this important?

  1. Stops Underreporting of Profits
    Businesses earning higher profits can no longer misuse the presumptive system.

  2. Fewer Tax Disputes
    Clearer guidelines mean reduced chances of litigation with the Income Tax Department.

  3. Promotes Honest Tax Practices
    Encourages accurate reporting and builds accountability in compliance.

  4. Simplifies with Fairness
    Balances simplified filing with fair contribution to the tax system.

Just as tax planning requires clarity, your investments deserve the same. With Bajaj Finance FD, you get transparent terms, no hidden charges, and guaranteed growth. Invest now.

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
Recommended

Fixed Deposit - 60 Months

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Senior Citizen

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Age below 60

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Minor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - HUF

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Sole Proprietor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Who will be most affected by the new rules?

  • Small Businesses & Traders: Can benefit from higher turnover limits.
  • Freelancers & Professionals: Doctors, lawyers, IT consultants must realign tax planning under new gross receipt thresholds.
  • Cash-Heavy Businesses: Firms depending on cash will face higher tax liability compared to digital-first firms.

Examples of presumptive taxation

  • Small Retailers: Grocery shop with Rs. 2 crore turnover → taxed at 8%.
  • Freelancers: Graphic designer earning Rs. 50 lakh → 50% considered as income.
  • Transport Operators: Pay fixed tax per vehicle under Section 44AE.
  • Medical Clinics: Clinics under Rs. 75 lakh turnover declare 50% as profit.
  • Wholesale Traders: Eligible for 8% if within Rs. 3 crore turnover limit.

Also Read: What is Tax Avoidance

What are the rates for presumptive taxation?

Under the presumptive taxation scheme, income is calculated at fixed rates based on the type of receipts. For businesses, 8% of cash receipts and 6% of digital receipts are considered taxable income. For professionals, 50% of total gross receipts is treated as income, simplifying tax calculations and reducing the need for detailed bookkeeping.

Conclusion

The Presumptive Taxation Scheme is a smart solution for small businesses and professionals who want hassle-free tax compliance. With the updates in the Income Tax Bill 2026, taxpayers must report actual profits if they exceed presumptive rates—making the system fairer and more transparent.

To complement your tax-saving efforts, secure your money with Bajaj Finance Fixed Deposits. With guaranteed returns, flexible tenures, and some of the industry’s highest interest rates of up to 7.30% p.a., FDs provide the stability your portfolio needs while you focus on business growth. Invest now.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

Fixed Deposit Calculator

Sukanya Samriddhi Yojana Calculator

PPF Calculator

Recurring Deposit Calculator

Provident Fund Calculator

Gratuity Calculator

Frequently asked questions

Who is eligible for the presumptive taxation scheme?

The Presumptive Taxation scheme is available to:

  • Individuals
  • Hindu Undivided Families (HUFs)
  • Partnership firms (except LLPs)

Companies and Limited Liability Partnerships (LLPs) are not eligible under this scheme.

What does 6% Presumptive Taxation mean?

Under Presumptive Taxation (Section 44AD), businesses with turnover within the prescribed limit can declare a fixed percentage of profits. For digital transactions, 6% of turnover is considered taxable income, while for cash transactions, it's 8%.

What is the turnover limit for Presumptive Taxation?

To opt for Presumptive Taxation under Section 44AD, your business turnover must not exceed Rs. 3 crore in a financial year.

What are the latest changes in Presumptive Taxation rules?

The scheme continues with deemed profit rates of 8% for cash and 6% for digital transactions. For professionals under Section 44ADA, the limit has been raised to Rs. 75 lakh from Rs. 50 lakh in the latest tax bill.

How is tax calculated under the Presumptive Taxation scheme?

Tax is calculated by applying 8% on cash-based turnover or 6% on digital receipts. This estimated income is considered taxable without the need to maintain detailed accounts.

Can you give an example of Presumptive Income?

Sure. If a graphic designer earns Rs. 60 lakh in a year, they can declare 50% (Rs. 30 lakh) as taxable income under Section 44ADA. Similarly, a transporter with 5 trucks pays tax based on a fixed income per truck under Section 44AE.

Who is eligible to opt for Presumptive Taxation?

Businesses with annual turnover below Rs. 3 crore and professionals earning under Rs. 75 lakh can opt in. However, once chosen, you must file ITR-4 and cannot claim deductions under Sections 30 to 38 for business expenses.

Show More Show Less

Related videos

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

● Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.

● Explore and apply for co-branded credit cards online.

● Invest in fixed deposits and mutual funds on the app.

● Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.

● Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.

● Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on No Cost EMIs.

● Shop from over 100+ brand partners that offer a diverse range of products and services.

● Use specialised tools like EMI calculators, SIP Calculators

● Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.

Show All Text