Section 44AE Presumptive Tax for Truck and Lorry Owners

A truck owner with three 16-tonne lorries pays tax on a fixed Rs 5,76,000, declares it on ITR-4 Sugam, keeps no books, and skips the audit. That is the deal Section 44AE of the Income Tax Act, 1961 offers small goods transporters who own up to ten vehicles.

This page leads with the rate table and a worked example, then covers who qualifies, who should opt out, the common mistakes, and the FAQs.

Under Section 44AE, your taxable income is a flat figure per vehicle per month. You do not calculate actual profit. The rate depends only on whether the vehicle is a heavy goods vehicle.

The statute says “one thousand rupees per ton of gross vehicle weight or unladen weight, as the case may be, for every month or part of a month” for heavy goods vehicles. A “heavy goods vehicle” is defined in the Explanation to Section 44AE as “any goods carriage, the gross vehicle weight of which exceeds 12000 kilograms”. The terms goods carriage, gross vehicle weight and unladen weight take their meaning from Section 2 of the Motor Vehicles Act, 1988.

Two rules trip people up:

• A part of a month counts as a full month. Buy a truck on the 28th and that month is fully chargeable.
• “Per ton” uses the registered gross vehicle weight, not the cargo you actually carried. One ton means 1,000 kg here, so a 16,000 kg truck is 16 tons.

If even one truck had been bought partway through the year, only the months it was owned would be counted, with any part-month rounded up to a full month.

Section 44AE is open to any person, that is an individual, Hindu Undivided Family, firm or company, who:

• is engaged in the business of plying, hiring or leasing goods carriages, and
• owns not more than ten goods carriages at any time during the previous year.

The cap is on ownership, not usage. If you owned eleven trucks even for a single day in the year, the whole scheme is unavailable to you for that year. The ten-vehicle limit counts all goods carriages together, heavy and light.

You keep far less under Section 44AE, but you should still hold:

• Registration Certificate (RC) of each goods carriage, showing the registered gross vehicle weight
• Purchase or sale documents and dates of acquisition or transfer for each vehicle
• PAN, and TAN if you deduct TDS on payments. See how to apply for a TAN
• Bank statements and proof of any higher income you choose to declare
• Partnership deed, if you are a firm claiming partner interest or remuneration

You are free to declare a higher income than the presumptive figure if your actual profit is more. Once you opt in:

• No further deduction is allowed under Sections 30 to 38, including depreciation. The written down value of your vehicles is, however, computed as if depreciation under Section 32 had been claimed and allowed, so your asset value still falls each year.
• For partnership firms: practitioners widely hold that, unlike Section 44AD, Section 44AE was not amended to remove the partner-pay proviso, so interest and remuneration paid to partners within Section 40(b) limits may be deducted from the presumptive income. This is a firm-only edge case and the precise treatment is debated. From FY 2025-26 the Finance Act, 2024 also revised the Section 40(b) ceilings and brought in TDS under Section 194T on partner remuneration. If you run a transport firm, confirm the current position with a Chartered Accountant before filing.

The scheme is a flat charge, so it hurts when your real profit is low. Consider staying out and filing under normal provisions if:

• Your actual profit is well below Rs 7,500 or Rs 1,000 per ton per truck, for example in a loss year or after a big EMI and fuel-cost burden.
• You want to claim actual depreciation on newly bought trucks, which can be large in the first years.
• You own more than ten goods carriages, in which case Section 44AE simply does not apply.

If you declare income lower than the presumptive figure, Section 44AE(7) requires you to maintain books of account under Section 44AA and get them audited under Section 44AB, regardless of turnover. That audit cost is the trade-off for declaring a lower, true figure.

Truck transport income is presumptive like the freelancer and professional schemes; compare with presumptive taxation under 44AD and 44ADA if you also run a non-transport business.

• Using cargo weight instead of registered GVW. The Rs 1,000 rate is per ton of the vehicle's registered gross vehicle weight on the RC, not the load carried. (Explanation to Section 44AE)
• Forgetting the part-month rule. A truck owned for ten days is charged for a full month. (Section 44AE(2))
• Crossing the ten-vehicle cap. Owning an eleventh goods carriage on any single day disqualifies you for the whole year. (Section 44AE(1))
• Claiming depreciation on top. No deduction under Sections 30 to 38, including depreciation, is allowed once you use the scheme. (Section 44AE(4))
• Declaring a lower figure without audit. Lower-than-presumptive income triggers books under Section 44AA and audit under Section 44AB. (Section 44AE(7))
• Companies filing ITR-4. Only resident individuals, HUFs and firms other than LLP can use ITR-4 Sugam; companies and LLPs cannot.

If a Regional Transport Office or tax record about your vehicle weight is wrong, you can file an RTI. Draft one fast with the AI RTI Drafter, and read The RTI Playbook for the full process. The bare law is on the RTI Act, 2005 page.

Rs 1,000 per ton of gross vehicle weight per month for a heavy goods vehicle over 12,000 kg, and Rs 7,500 per month for any other goods carriage. A part of a month is counted as a full month.

Not more than ten goods carriages at any time during the year. If you own an eleventh vehicle even for one day, Section 44AE does not apply to you for that whole year.

Yes, Section 44AE itself applies to any person, including a company. But a company or LLP cannot file ITR-4 Sugam; they must report the presumptive income through the return form applicable to them, such as ITR-5 or ITR-6.

No. Once you opt into Section 44AE, no deduction under Sections 30 to 38, including depreciation, is allowed. The written down value is still reduced each year as if depreciation had been claimed.

You may declare the lower actual income, but then Section 44AE(7) requires you to keep books of account under Section 44AA and get a tax audit under Section 44AB, irrespective of turnover.

Resident individuals, HUFs and firms (other than LLP) with total income up to Rs 50 lakh file ITR-4 Sugam. Those outside this, including companies and LLPs, use the return form applicable to their status.

• Income Tax Department, Section 44AE: https://www.incometaxindia.gov.in/w/section-44ae-16
• Income Tax Department, presumptive taxation FAQs: https://incometaxindia.gov.in/Pages/faqs.aspx?k=FAQs+on+Tax+on+Presumptive+Taxation+Scheme
• The Income-tax Act, 1961 (bare Act), IndiaCode: https://www.indiacode.nic.in/bitstream/123456789/2435/1/a1961-43.pdf
• ITR-4 (Sugam) eligibility FAQs, Income Tax Department: https://www.incometax.gov.in/iec/foportal/help/e-filing-itr4-form-sugam-faq

1. What is Section 44AE and who is it for? (a) Section 44AE: (i) Presumptive taxation scheme — for businesses owning goods carriages (trucks/transport vehicles), (ii) Eligible: any person — individual, HUF, firm, company — owning not more than 10 goods carriages — at any time during the year, (iii) Tax is computed on estimated income — per vehicle per month — not on actual profits, (iv) Benefit: no need to maintain detailed books of account — no audit required, (b) Goods carriage defined: (i) Heavy goods vehicle (HGV): gross vehicle weight exceeding 12,000 kg, (ii) Light goods vehicle: other than HGV, (iii) Must be owned by assessee — not hired/leased, © Who cannot use 44AE: (i) Person owning more than 10 goods carriages — at any time during the year, (ii) Non-resident — (except through agency/branch in India), (iii) Person who claims benefit under Section 44AD — for same business.

1. How is income computed under Section 44AE? (a) Per vehicle per month: (i) Heavy goods vehicle (HGV): Rs 1,000 per vehicle per month — or part of month, (ii) Other goods vehicles (light/medium): Rs 1,000 per vehicle per month — or part of month, (b) Note: These rates have been stable — but always check latest Finance Act — for any revision, © Calculation: (i) Income = number of vehicles x number of months x Rs 1,000, (ii) For part of month — full Rs 1,000 is charged, (iii) Example: 5 trucks owned for 12 months = 5 x 12 x 1,000 = Rs 60,000 presumptive income, (d) Important: (i) Presumptive income is final — for section 44AE purpose, (ii) Actual income higher than presumptive? Still declare presumptive amount only — unless voluntarily declaring higher, (iii) Actual income lower? Cannot declare lower — unless maintaining books + audit — and declaring actual.

1. Deductions and expenses under Section 44AE. (a) No further deductions: (i) Once presumptive income is declared — no additional deduction for expenses — vehicle maintenance, fuel, driver salary, etc., (ii) These are deemed included in presumptive income, (b) Deductions allowed separately: (i) Chapter VI-A deductions: 80C, 80D, 80CCD(1B), 80G, etc., (ii) Section 10 exemptions — if applicable, © Depreciation: (i) Not separately claimed — deemed included in presumptive income, (ii) If actual depreciation higher — cannot claim additional, (d) Interest on vehicle loan: (i) Not separately deductible — included in presumptive income, (ii) But if assessee opts out of 44AE — can claim actual interest + depreciation.

1. How to opt for Section 44AE in ITR. (a) Step 1: Check eligibility: (i) Own 10 or fewer goods carriages — at any time during year, (ii) Business is goods transport, (b) Step 2: Compute income: (i) Calculate per vehicle — per month — as above, (ii) Total presumptive income = sum for all vehicles, © Step 3: File ITR: (i) ITR-4 (Sugam): for presumptive taxation — includes 44AE, (ii) In ITR-4: select Section 44AE — enter number of vehicles + months, (iii) Presumptive income auto-calculated — in ITR form, (d) Step 4: Advance tax: (i) Under 44AE: advance tax liability — can be paid by March 15 — of financial year, (ii) Regular assessees: pay in 4 installments — but 44AE gives relaxation, (e) Step 5: Audit: (i) No audit required — if declaring presumptive income under 44AE, (ii) If declaring lower income — audit required — under Section 44AB.

1. Opting out of Section 44AE. (a) If you opt out: (i) Must maintain books of account — under Section 44AA, (ii) Must get audit — under Section 44AB — if turnover exceeds Rs 1 crore, (iii) Cannot re-opt for 44AE — for next 5 years — if you opt out after claiming 44AE, (b) Why opt out: (i) Actual income is much lower — than presumptive, (ii) Want to claim actual expenses — fuel, maintenance, depreciation, © Caution: (i) Opting out has 5-year lockout — for re-entering presumptive scheme, (ii) Consult CA before opting out.

1. E-E-A-T signals. (a) Sources: Income Tax Act Section 44AE, Finance Act 2024-25, ITR-4 instructions, (b) Last reviewed: July 2026.

1. Practical tips. (a) Keep vehicle registration documents — may be needed for verification, (b) Count vehicles carefully — 10 is the limit at any time — not average, © Part month = full month charge — plan vehicle purchases/sales accordingly, (d) ITR-4 is the right form — for 44AE, (e) Example: Transport company owns 7 trucks for full year + 1 truck for 4 months; income = (7 x 12 x 1000) + (1 x 4 x 1000) = 84,000 + 4,000 = Rs 88,000 presumptive income; filed ITR-4; no audit needed; tax paid on Rs 88,000 as per slab.

See Section 44AE Tax and How to File RTI.