Income Tax for Truck Owners: Section 58 (Old 44AE) 2026-27

Most articles still say section 44AE and the old 12% GST rate. The Income-tax Act 2025 is in force from 1 April 2026 and the goods-carriage scheme now sits in section 58(2), Table serial number 2: "business of plying, hiring or leasing goods carriage", for "an assessee, who owns not more than ten goods carriages at any time during the tax year". Two points from the Act text that people miss. First, the limit is checked at any time during the tax year: if you owned eleven trucks even for a week, you are outside the scheme for that year. Second, a truck you hold on hire purchase or instalments, with part of the price still due, is treated as yours (section 58(11)(f)). The words "goods carriage" and "gross vehicle weight" have the meaning given in section 2 of the Motor Vehicles Act, 1988 (section 58(11)(d)); the gross vehicle weight is printed on the registration certificate. This guide is general information, not tax advice. The Act text was read from the Gazette of India, but your facts (ownership dates, other income, partnership or company) decide what applies to you.

Section 58(2), Table serial 2, adds up the income from each goods carriage: - A heavy goods vehicle (gross vehicle weight above 12,000 kg, section 58(11)(e)): Rs 1,000 per ton of gross vehicle weight (the Act says "gross vehicle weight or unladen weight, as the case may be") for each vehicle, for every month or part of a month in which you own it during the tax year. - Any other goods carriage: Rs 7,500 for each vehicle, for every month or part of a month in which you own it. - Or the profit you actually earned, whichever is higher. "Month or part of a month" means a truck bought on 28 March still counts for the whole month of March. Selling counts the same way. Three more rules in the section: no loss, allowance or deduction is allowed against this income (58(4)); if you are a firm, salary and interest paid to partners can be deducted within the limits of section 35(e) (58(5)); and the written down value of the trucks is worked out as if you had claimed depreciation every year (58(6)). The Act text does not say how to treat a fraction of a ton, such as 16.2 tons; we have used 16.2 in the example below, and your CA should confirm how a part-ton is treated.

A transporter, an individual, owns three heavy trucks with a gross vehicle weight of 16.2 tons each (above 12,000 kg, so heavy) and one small truck (gross vehicle weight under 12,000 kg) for the whole of 2026-27 (April 2026 to March 2027). Per month: - One heavy truck: 16.2 tons x Rs 1,000 = Rs 16,200 - Three heavy trucks: 3 x Rs 16,200 = Rs 48,600 - Small truck: Rs 7,500 - Whole fleet: Rs 48,600 + Rs 7,500 = Rs 56,100 For the year (12 months): Rs 56,100 x 12 = Rs 6,73,200. Check by vehicle: each heavy truck Rs 16,200 x 12 = Rs 1,94,400; three trucks Rs 5,83,200; small truck Rs 7,500 x 12 = Rs 90,000; total Rs 5,83,200 + Rs 90,000 = Rs 6,73,200. Now suppose the third heavy truck is bought on 15 December 2026. It is owned in December, January, February and March: 4 months (December counts as a part month). April to November: two heavy trucks and the small truck = Rs 32,400 + Rs 7,500 = Rs 39,900 a month, 8 months = Rs 3,19,200. December to March: the full fleet at Rs 56,100 a month, 4 months = Rs 2,24,400. Total: Rs 3,19,200 + Rs 2,24,400 = Rs 5,43,600. If the transporter's actual profit is higher than this figure, the higher figure is used. This example takes the weight in the Act text as gross vehicle weight; read the number from the registration certificate of each truck.

You may claim that your actual profit is lower than the presumptive figure, for example in a year with heavy repairs or idle trucks. Section 58(3) says that if you do, and your total income is more than the maximum amount not chargeable to tax, you must keep books of account as required by section 62 and get them audited and furnish the audit report as required by section 63. Section 58(10) says the books and audit rules of sections 62 and 63 otherwise do not apply to this goods-carriage business. In plain terms: the scheme saves you from keeping full books only while you accept the presumptive figure (or declare more). Declaring less than the presumptive figure on an income above the basic exemption limit brings in books and a tax audit. Talk to your CA before the year ends, not at filing time, because the books have to exist for the whole year.

A broker or commission agent cannot use section 58 for commission income. Section 58 is for the business of plying, hiring or leasing goods carriages by a person who owns them, and the amount is worked out per truck owned. A broker who arranges loads and earns a commission or brokerage owns no truck for that business, so there is no truck to count; the Act also lists "does not earn any income in the nature of commission or brokerage" and "does not carry on any agency business" as conditions for an "eligible assessee" (section 58(11)(a)). That definition is written for Table serial 1 (the 6% / 8% scheme for other businesses), so for a broker the practical point is the first one: commission is not income from your own trucks. Brokerage income is taxed on actual profit with ordinary books. A transporter who owns trucks and also earns commission on loads given to other trucks should have the two kinds of income looked at separately by a CA. Also outside the scheme: anyone who owned more than ten goods carriages at any time during the tax year, and the persons the Act's own conditions exclude. The scheme is for owners; a firm can use it (with the partner salary and interest rule in 58(5)). Two things stay separate whichever way you compute income. GST: a transporter who is a goods transport agency still charges or pays GST as the case may be and files GST returns; presumptive income tax does not change that (see our GST on GTA and GSTR-1 guides). TDS: a person who owns at most ten goods carriages and gives the payer a declaration with PAN is exempt from TDS on freight under section 393(4), Table serial 8 (see our TDS guide).

The new-regime slabs for 2026-27, as widely reported, are: - up to Rs 4,00,000: nil - Rs 4,00,001 to Rs 8,00,000: 5% - Rs 8,00,001 to Rs 12,00,000: 10% - Rs 12,00,001 to Rs 16,00,000: 15% - Rs 16,00,001 to Rs 20,00,000: 20% - Rs 20,00,001 to Rs 24,00,000: 25% - above Rs 24,00,000: 30% Only the nil slab up to Rs 4,00,000 has been checked by us against the Finance Act 2026 text. The remaining rates are as widely reported; check them against the schedule of the Finance Act before you rely on them. A rebate is widely reported to make income up to Rs 12,00,000 tax-free, and health and education cess is added on any tax that is payable; check both. Using the example above: presumptive income of Rs 6,73,200 as the only income. Before any rebate, the slab tax is (Rs 6,73,200 - Rs 4,00,000) x 5% = Rs 2,73,200 x 5% = Rs 13,660. With the rebate, as widely reported, the tax is nil because income is below Rs 12,00,000. For comparison, a taxable income of Rs 14,00,000 would give Rs 4,00,000 x 5% = Rs 20,000, plus Rs 4,00,000 x 10% = Rs 40,000, plus Rs 2,00,000 x 15% = Rs 30,000, a total of Rs 90,000 before cess. Which income-tax return form to file depends on your facts and on the forms notified for the year. ITR-4 and ITR-3 are the forms commonly used by presumptive filers and by business filers who keep books; check on the income-tax portal which form is offered to you before you file.