Presumptive tax scheme can reduce compliance burden, return filing

Simplifies ITR filing, but can be taxing if actual income is below 8% of turnover

In a recent case, the Amritsar Bench of the Income-Tax Appellate Tribunal (ITAT) reaffirmed that an assessee who has availed of the presumptive taxation scheme (PTS) under Section 44AD of the Income-Tax (I-T) Act has no liability to maintain books of account.

In the Sarabjeet Singh versus I-T Office case, the assessee had filed his I-T returns (ITR) under PTS. The assessing officer (AO) noticed a large deposit of cash in the assessee’s bank account, which was later withdrawn for business purposes. The AO treated the deposit as part of the assessee’s total income and passed an order for reassessment