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How 44AE works
- Applies to owners of not more than ten goods carriages at any time in the year
- Deemed income: ₹1,000 per tonne of gross vehicle weight per month (or part) for heavy goods vehicles above 12 tonnes; ₹7,500 per month for others
- No other expense is allowed — depreciation is treated as claimed; firms can still deduct partner salary and interest
- You may declare a higher income; declaring lower needs books and audit
TDS on freight
Clients deduct 1%/2% TDS under section 194C on freight — but not if you own ten or fewer goods carriages and give them your PAN with a declaration. Keep the declaration on file for each client every year.
GST
| Situation | GST |
|---|---|
| Truck owner hiring out a vehicle to a GTA | Exempt |
| Carrying goods without issuing a consignment note | Exempt |
| GTA (issues consignment note) to factories, companies, firms, registered persons | Reverse charge — the recipient pays 5%, unless the GTA opts for forward charge |
| GTA opting for forward charge | 5% without ITC or 18% with ITC — option filed before the year begins |
Advance tax
Presumptive taxpayers pay their entire advance tax in one instalment by 15 March. You can always declare a higher income than the presumptive rate; declaring lower needs books and, above the basic exemption limit, a tax audit.
Worked example
Example: Ramesh owns two 25-tonne trucks for the full year and one light goods vehicle. 44AE income = 2 × 25 × ₹1,000 × 12 + ₹7,500 × 12 = ₹6,00,000 + ₹90,000 = ₹6,90,000.
Common mistakes
- Owning an 11th vehicle even for a month (44AE lost)
- Not giving the 194C declaration
- Registering for GST without need
Frequently asked questions
Yes — vehicles taken on hire purchase or instalments count as owned for 44AE.
Last reviewed on 11 November 2026 by Vinay Jaglan, VJ & Associates. Law and portal screens change — verify before acting, or ask the office.
