Presumptive taxation, such as under section 58 of the Income-tax Act, 2025, involves which one of the…

Presumptive taxation computes income by an indirect, deemed method instead of from the taxpayer's actual accounts. Under section 58 of the Income-tax Act, 2025 (formerly sections 44AD, 44ADA and 44AE of the 1961 Act), an eligible resident may declare business profits at 6% (receipts through banking or online modes) or 8% (other receipts) of total turnover or gross receipts (turnover up to Rs 2 crore, or Rs 3 crore where cash receipts do not exceed 5%), profits of a specified profession at 50% of gross receipts (up to Rs 50 lakh, or Rs 75 lakh where cash receipts do not exceed 5%), and income from plying, hiring or leasing goods carriages (not more than ten) at a fixed amount for every month of ownership, or a higher profit actually earned. The other options are unrelated: presumptive taxation does not shift tax liability between governments, short-term capital gains are computed under the capital gains provisions, and section 157 grants relief where salary is received in arrears or in advance.