Section 44AE for goods carriages
The per-vehicle presumptive scheme for transporters, and how it differs from 44AD
Section 44AE is the presumptive scheme for the business of plying, hiring or leasing goods carriages, and it is separate from Section 44AD. You qualify if you own no more than 10 goods vehicles at any time in the year. The deemed income is a flat amount per vehicle per month: Rs 1,000 per tonne of gross vehicle weight for a heavy goods vehicle (over 12 tonnes), and Rs 7,500 per month for any other goods vehicle. There is no turnover-based percentage and no 6 or 8% calculation, it is purely per vehicle, per month (or part of a month) it is owned.
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How the per-vehicle calculation works
You count each goods vehicle you owned and for how many months (any part of a month counts as a full month). For a heavy goods vehicle, over 12 tonnes gross vehicle weight, the deemed income is Rs 1,000 per tonne of gross vehicle weight per month. For any other goods vehicle, it is a flat Rs 7,500 per month. Add the figures across your vehicles and months to get the deemed income for the year. You can declare a higher actual income, but not lower without triggering books and audit.
Who can use it
Section 44AE is for any person (individual, HUF, firm, LLP or company) in the business of plying, hiring or leasing goods carriages, who owns not more than 10 such vehicles at any time during the year. Cross 10 vehicles and you fall out of 44AE and must compute actual profits with books and audit as applicable. Note this is the scheme that the general business scheme, Section 44AD, specifically excludes, so a transporter belongs here, not in 44AD.
warningOwning an eleventh goods vehicle at any point in the year takes you out of 44AE entirely for that year, you then compute actual profits and the audit rules apply.
- In the business of plying, hiring or leasing goods carriages
- Owns no more than 10 goods vehicles at any time in the year
- Declares at least the per-vehicle deemed income (Rs 1,000/tonne or Rs 7,500/month)
- Note: this excludes the same activity from Section 44AD
Why a transporter is not on 44AD
Section 44AD covers most small businesses, but the business of plying, hiring or leasing goods carriages is specifically excluded from it, precisely because it has its own scheme in 44AE. So a haulier, courier fleet or transporter uses 44AE (per vehicle) rather than 44AD (6 or 8% of turnover). A driver who instead earns from driving for an aggregator (not owning goods carriages for hire) is in a different position, that is covered on our taxi and delivery-driver page.
tip44AE works best when your vehicles earn well, because the deemed income is fixed per vehicle regardless of turnover. If a vehicle has a poor year, the flat deemed income still applies, so compare against actual-books before assuming 44AE is cheaper.
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Source / notes
- Income-tax Act 1961 s.44AE (goods carriages) (consolidated into the Income-tax Act 2025 s.58)
- Income-tax Act 1961 s.44AD (which excludes the goods-carriage business)
Frequently asked questions
How is income calculated under Section 44AE?+
Per vehicle, per month owned. A heavy goods vehicle (over 12 tonnes gross vehicle weight) gives deemed income of Rs 1,000 per tonne of gross vehicle weight per month; any other goods vehicle gives a flat Rs 7,500 per month. Any part of a month counts as a full month. Add these across your vehicles to get the year's deemed income.
How many vehicles can I own and still use 44AE?+
Up to 10 goods carriages at any time during the year. If you own an eleventh at any point, you fall out of 44AE for that year and must compute your actual profits, with a tax audit if the thresholds apply. The 10-vehicle test is about ownership at any time, not the average.
Can a transporter use Section 44AD instead?+
No. The business of plying, hiring or leasing goods carriages is specifically excluded from Section 44AD because it has its own scheme in Section 44AE. So a transporter or haulier uses the per-vehicle 44AE figures, not the 6 or 8% turnover basis of 44AD.
Can I declare less than the 44AE deemed income?+
Yes, but at a cost: if you declare lower actual profit, you must keep books of account and get a tax audit under Section 44AB for that year. Most operators with profitable vehicles use the flat deemed income; those with a poor year should compare it against actual-books before deciding.
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