Income Tax Act 2025 stops deductions against presumptive income

Business Jul 15, 2026

The new Income Tax Act, 2025, has changed how small businesses and freelancers are taxed.

Even though turnover limits and tax rates haven't moved, you can no longer claim losses or deductions against your presumptive income.

For many, this means paying more tax, especially if you used to rely on those write-offs.

Section 58 bars deductions, increases paperwork

Sections 44AD, 44ADA, and 44AE have been rolled into a single Section 58 with all loss claims and all deductions gone, including things like short-term capital losses or health insurance benefits (Section 80D).

Audit thresholds stay the same, but if your profits fall below set rates, get ready for more paperwork: detailed books and possible audits are now required.