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Business Tax
Updated: 15th August 2026•Income-tax Act, 2025 (TY 2026-27)

Business & Corporate Tax Guide: Structures, Slabs & Presumptive Schemes

व्यवसाय एवं कंपनी कर संपूर्ण गाइड

Comprehensive guide to business taxation in India: selecting the right tax structure (Sole Proprietorship, Partnership, LLP, Private Limited), Section 44AD/44ADA presumptive taxation, Section 44AB tax audit rules, and corporate tax provisions.

Written by: Author Profile
Direct Tax & CA Review Panel

Chartered Accountancy Review Panel • Senior Direct Tax Review Desk

Reviewed & Fact-Checked by: Technical Review Panel
Tax Law & Dispute Review Desk

Tax Litigation & Legal Review Panel • Tax Appeal & Procedure Review Desk

Published: 1st April 2026•Last Updated: 15th August 2026•Last Reviewed: 15th August 2026

Key Statutory Highlights (FY 2026-27 (AY 2027-28))

Sole proprietorship profits are taxed at individual progressive income tax slab rates.
Section 44AD presumptive scheme allows small businesses up to ₹2 Cr (₹3 Cr digital) to declare deemed profit at 6% (digital) / 8% (cash) without tax audit.
Section 44ADA offers professionals (doctors, lawyers, CAs, IT consultants) 50% deemed profit on receipts up to ₹50 Lakh (₹75L digital).
Partnership firms and LLPs are taxed at flat 30% (+ 12% surcharge if total income > ₹1 Cr + 4% cess).
Domestic companies can opt for Section 115BAA concessional base tax rate of 22% (effective 25.17% incl. surcharge and cess).

Who is Eligible & When Does it Apply?

Applicability #1

Proprietorship businesses, MSMEs, traders, manufacturers, e-commerce sellers.

Applicability #2

Specified professionals and freelance consultants.

Applicability #3

Partnership firms, LLPs, Private Limited, and Public Limited companies.

Step-by-Step Procedure & Compliance Roadmap

1

Classify Business Entity Structure

Determine whether taxation is governed by individual slab rates (Proprietorship), flat entity rates (LLP/Firm @ 30%), or corporate rates (Section 115BAA @ 22%).

2

Evaluate Presumptive Taxation vs Audited Books

Check if turnover qualifies for Section 44AD or 44ADA to save bookkeeping and audit expenses.

3

Maintain Compliance & Deposit Advance Tax

Pay quarterly advance tax installments (15th Jun, 15th Sep, 15th Dec, 15th Mar) to avoid interest penalty under Section 234B/234C.

4

Conduct Tax Audit (If Turnover > Threshold)

Obtain Form 3CA/3CB and Form 3CD tax audit report from a practicing Chartered Accountant before 30th September.

5

File ITR-3, ITR-4, ITR-5 or ITR-6

Submit appropriate ITR form on the Income Tax portal before the statutory due date (31st July for non-audit / 31st October for audited entities).

Mandatory Documents Checklist

Audited Profit & Loss Account and Balance Sheet
Bank statements of all business accounts
GSTR-9 annual return and GSTR-3B monthly filings
Form 26AS and AIS showing TDS deductions u/s 194C/194J/194Q
Fixed asset depreciation schedules

Common Mistakes & Compliance Risks to Avoid

•Failing to deposit advance tax quarterly, leading to significant Section 234C interest penalties.
•Claiming personal expenses as business deductions without legitimate business nexus.
•Ignoring the digital turnover threshold when evaluating Section 44AD eligibility.

Frequently Asked Questions

When is a Tax Audit mandatory for a business?

Under Section 44AB, a tax audit by a CA is mandatory if annual business turnover exceeds ₹1 Crore (or ₹10 Crore if cash transactions do not exceed 5% of total receipts/payments).

Interactive Tax Calculators
Business & Presumptive Tax CalculatorGST CalculatorTDS Calculator
Related Tax Knowledge
Presumptive Taxation Guide (44AD/44ADA)Proprietorship Tax GuideLLP & Partnership TaxationCompany Taxation (Pvt Ltd)
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🛡️ Educational Disclaimer: FinSetu India is an independent educational guidance and calculation platform. Content is published for general citizen awareness based on applicable laws as of FY 2026-27 (AY 2027-28). We do not provide personalized legal/tax advice or file returns directly. Verify current applicable rules on official portals or consult a qualified Chartered Accountant / Tax Lawyer.