Vinit has been engaged in the plying, hiring and leasing of goods carriage business for the last 20 years with the name of Vinit Enterprises and Sanjay is engaged in the business of textiles. Due to the continuous loss i

Since SS Enterprises does not own more than 10 vehicles at any time during the previous year 2024-25, the firm is eligible to opt for a presumptive taxation scheme under section 44AE. ₹1,000 per ton of gross vehicle weight or unladen weight per month or part of the month for each heavy goods vehicle and ₹7,500 per month or part of a month for each goods carriage other than heavy goods vehicle, owned by him would be deemed as his profits and gains from such goods carriage in case the assessee opted for presumptive taxation scheme. Option 1: Computation of Income for the Assessment Year 2025-26 as per section 44AE For Heavy Goods Vehicle No of Vehicle Ownership months Vehicle weight Presumptive Income 6 11 14 MT 6 × 14 × 1,000 × 11 = 9,24,000 For other than Heavy Goods Vehicle No of Vehicle Ownership months Presumptive Income 4 11 4 × 7,500 × 11 = 3,30,000 Total Presumption Income 9,24,000 + 3,30,000 = ₹12,54,000 Less: Interest on capital (6,60,000) Less: Remuneration to partners (4,40,000) Business Income/Total Income 1,54,000 Option 2: Computation of Income for the Assessment Year 2025-26 as per Income Tax (normal provision) Particulars Amount (₹) Gross Receipts 1,23,00,000 Less: Admissible Expenses Drivers' salary (35,00,000) Repairs and Maintenance (3,57,000) Interest on bank loan (7,40,000) Diesel (12,40,000) Other allowed expenses (2,60,000) Depreciation (as per income tax act) (50,40,000) Interest to partners on capital @12% (As per section 40(b) (6,60,000) Remuneration paid to partners as per section 40(b) (4,40,000) Net Profit 63,000 M/s SS Enterprises has a lower income in option no. 2 hence SS Enterprises should choose for 2nd option. However, it should be noted that if they are declaring Profits and Gains from the business of leasing or hiring of goods carriages which is less than deemed income under section 44AE of the Income Tax Act, then they should maintain the books of accounts and get them audited under section 44AB of the Income Tax Act.