Section 44AE of the Income Tax Act prescribes presumptive taxes on heavy goods vehicles (HGVs). Clause (i) of sub-section (2) of this section states that the presumptive rate of income is equal to one thousand rupees per ton of gross vehicle weight (GVW) or unladen weight (ULW) for every month or part of a month during which the HGV is owned by the assessee.
However, this clause is open to interpretation and is causing confusion in its application. It is not clear how to calculate the presumptive income under this section, as there is both GVW and ULW for every HGV.
It is suggested that instead of the current calculation prescribed under section 44AE(2)(i), a fixed monthly rate of Rs 15,000/- per month per HGV may be prescribed. This will simplify the application of this section and remove any confusion that may arise.