Amendment of section 44AE
16. In section 44AE of the Income-tax Act, ]with effect from the 1st day of April, 2015,––
(i) for sub-section (2), the following sub-section shall be substituted, namely:––
“(2) For the purpose of sub-section (1), the profits and gains from each goods carriage shall be an amount equal to seven thousand five hundred rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or an amount claimed to have been actually earned from the vehicle, whichever is higher.”;
(ii) in the Explanation, for clause (a), the following clause shall be substituted, namely:––
‘(a) the expression “goods carriage” shall have the meaning assigned to it in section 2 of the Motor Vehicles Act, 1988;’[59 of 1988].
Notes on Clauses:
Clause 16 of the Bill seeks to amend section 44AE of the Income-tax Act, relating to special provision for computing profits and gains of business of plying, hiring or leasing goods carriages.
Under the existing provisions contained in sub-section (1) of the aforesaid section, in the case of an assessee, who owns not more than ten goods carriages and who is engaged in the business of plying, hiring or leasing such goods carriages, the income of such business chargeable to tax under the head “Profits and gains of business or profession” is deemed to be the aggregate of the profits and gains from all the goods carriages owned by him in the previous year. Sub-section (2) of the aforesaid section inter alia provides that in the case of heavy goods vehicles, the profits and gains from each such goods carriages shall be deemed to be an amount equal to five thousand rupees, and four thousand five hundred rupees in the case of vehicles other than heavy goods vehicles, for every month or part of a month during which the vehicles are owned by the assessee or an amount higher than the aforesaid amount as declared by him in his return of income.
It is proposed to substitute the said sub-section (2) so as to provide that for the purposes of sub-section (1) amount of profit and gains for all types of goods carriages shall be seven thousand five hundred rupees per month or part of a month for each goods carriage or the amount claimed to be actually earned by the assessee, whichever is higher.
It is further proposed to make consequential amendment in the Explanation to said section to omit the reference to heavy goods vehicle.
These amendments will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years.
