M/s Guru Transport Co., a partnership firm is engaged in the business of playing, hiring and leasing of goods carriage owning 8 vehicles. The firm furnishes the following information for the previous year ending on 31.03

Option 1: Computation of Income for the Assessment Year 2024-25 as per section 44AE of the Income Tax Act, 1961 Particulars Amount (₹) 6 Vehicles (6 vehicle *18MT*₹ 1000 per ton * 12 month) Considered heavy goods vehicle > 12 MT) 12,96,000 4 Vehicles (4 vehicle * ₹ 7500 per month * 6 month) Considered other than heavy goods vehicle < 12 MT) 1,80,000 Total Income 14,76,000 Less: Interest to partners @12% (40,000) Salary to Partners (maximum allowed u/s 40(b) (v) (3,50,000) Presumptive Income 44AE (14,76,000-3,90,000) 10,86,000 Option 2: Computation of Income for the Assessment Year 2024-25 as per income tax normal provision Particulars Amount (₹) Total Receipts from 10 Vehicles (50,50,000+20,50,000) 71,00,000 Less: Expenses Allowed: Diesel 8,24,000 Driver Salary 12,00,000 Repair & Maintenance 4,22,000 Depreciation (15 Lakh * 6 * 30%) + (5 Lakhs * 4 * 15%) 30,00,000 Interest to partners @12% 40,000 Book Profit as per section 40(b) (v) 16,14,000 Salary to Partners (maximum allowed u/s 40(b)(v) -(150000 or 90% of 3,00,000 as higher = 2,70,000 -60% of (16,14,000 - 3,00,000) = 7,88,400 (270000+788400 = 1058400) Or Actual Salary i.e. 3,50,000 whichever is lower is allowed (3,50,000) Net Profit 12,64,000 Conclusion: Since Presumptive Income ₹ 10,86,000 is lower as compared to the Net Profit ₹ 12,64,000 so it would be preferable to opt to pay tax under presumptive income. Note: Since 44AE is a deemed income provision, the firm can choose to declare lower income, even if its net profit is higher than the presumptive income.