Presumptive Taxation under Section 44AD and 44ADA for FY 2024–25 (AY 2025–26)
Case 1: Mr. A – Professional under Section 44ADA
Scenario:
Mr. A is a practicing professional (e.g., Chartered Accountant, doctor, lawyer, architect, etc.). He received ₹50 lakh in his bank account during the financial year 2024–25 and did not withdraw any amount during the year.
Tax Treatment:

• Section 44ADA applies to specified professionals whose gross receipts do not exceed ₹75 lakh (for FY 2024–25), provided cash receipts do not exceed 5% of total receipts.
• Under this section, 50% of the gross receipts are deemed as income.
• In Mr. A’s case, 50% of ₹50 lakh = ₹25 lakh will be treated as taxable income.
• No requirement to maintain books of account.
• No requirement for audit under section 44AB.
• Whether Mr. A withdraws money from the bank account or not has no impact on the computation of taxable income under this section.

Case 2: Mr. B – Business Owner under Section 44AD
Scenario:
Mr. B runs a small business. He received ₹2.9 crore in his bank account during FY 2024–25. The entire amount was received through digital transactions, and he made no withdrawals during the year.
Tax Treatment:

• Section 44AD applies to eligible resident individuals, HUFs, and firms (except LLPs) engaged in eligible businesses.
• For FY 2024–25, the turnover limit is ₹3 crore, provided that cash receipts do not exceed 5% of the total turnover.
• If all ₹2.9 crore is received digitally, 6% of this amount = ₹17.4 lakh is deemed as income under Section 44AD.
• There is no requirement to maintain detailed books of accounts.
• Audit is not required unless the taxpayer reports lower income and his total income exceeds the basic exemption limit.
• Again, whether Mr. B withdraws any funds from the bank is irrelevant for tax purposes.

Key Points (General Summary):

• Section 44ADA is for professionals and allows 50% of receipts to be treated as income if receipts do not exceed ₹75 lakh and cash receipts are ≤5%.
• Section 44AD is for small businesses and allows 6% of digital turnover (or 8% for cash) as deemed income if total turnover does not exceed ₹3 crore and cash receipts are ≤5%.
• In both cases, there is no requirement to maintain books of account or undergo audit, provided the presumptive income is declared as prescribed.
• Bank withdrawals have no effect on taxable income computation under either section.

Conclusion:
For FY 2024–25 (AY 2025–26), Mr. A will declare ₹25 lakh and Mr. B will declare ₹17.4 lakh as their presumptive income, irrespective of whether any money was withdrawn from their accounts.