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 Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 44AD
In the 1961 statute, Section 44AD deals with 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.
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 44AD is retained and renumbered as Section 52 of the Income-tax Act, 2025. Retained. The enhanced limit of Rs. 3 Crores is solidified for businesses where cash receipts do not exceed 5% of total turnover.
The transition impact on Section 44AD is assessed as Very High. Simplifies tax filing for millions of retail traders and MSMEs.
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
Which subject does Section 44AD of the 1961 Act cover?
Section 44AD of the Income Tax Act, 1961 covers 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 Income-tax Act, 2025?
Section 44AD of the Income Tax Act, 1961 maps to Section 52 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. The enhanced limit of Rs. 3 Crores is solidified for businesses where cash receipts do not exceed 5% of total turnover.
How does the Income-tax Act, 2025 affect Section 44AD in practice?
The transition impact for Section 44AD is rated Very High. Simplifies tax filing for millions of retail traders and MSMEs.
What is new about Section 44AD under the Income-tax Act, 2025?
Lock-in period of 5 years maintained. Opting out restricts re-entry for the next 5 years. These points are specific to Section 44AD (Special provision for computing profits and gains of business on presumptive basis).
Disclaimer: This mapping of Section 44AD (Special provision for computing profits and gains of business on presumptive basis) to Section 52 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 44AD is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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