With effect from the assessment year 1994-95, section 44AE has been inserted with a view to providing for a method of estimating income from the business of plying, hiring or leasing trucks.

•  The salient features of the scheme are given below :The scheme applies to a person owning not more than 10 goods carriages. For this purpose, an assessee who is in possession of a goods carriage, whether taken on hire purchase or on instalments and for which the whole or part of the amount payable is still due, shall be deemed to be the owner of such goods carriages.
• The income from each goods carriage being a “heavy goods vehicle” will be estimated at Rs. 3,500 for every month or part of a month during which the goods carriage is owned by the assessee. The income from each goods carriage, other than a heavy goods vehicle will be estimated at Rs. 3,150 for every month or part of a month during which the goods carriage is owned by the assessee. In either case, the taxpayer can declare his income from trucks at a higher amount than that specified above.

• For this purpose “goods carriage” means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods; and “heavy goods vehicle” means any goods carriage the gross vehicle weight of which, or a tractor or a road-roller the unladen weight of either of which exceeds 12,000 kilograms.

• For instance, an assessee owns a light commercial vehicle for 9 months and 6 days, a medium goods vehicle for 10 months and a medium goods vehicle for 12 months during the previous year. His profits and gains from the three trucks shall be deemed to be (Rs. 3,150 ×10) + (Rs. 3,150 × 10) + (Rs. 3,150 × 12), i.e., Rs. 1,13,400/-
• If an assessee owns a heavy goods vehicle (weight exceeding 12,000 kg.) for 9 months and 5 days, a medium goods vehicle for 10 months and 10 days and a light commercial vehicle for 6 months during the previous year. His profits and gains from the three trucks shall be deemed to be (Rs. 3,500 × 10) + (Rs. 3,150 × 11) + (Rs. 3,150 × 6), i.e., Rs. 88,550/-
• The estimated income is comprehensive. All deductions under sections 30 to 38 including depreciation will be deemed to have been already allowed and no further deduction will be allowed under these sections. However, in the case of a firm, the normal deduction under section 40(b) shall be allowed. The written down value will be calculated, where necessary, as if depreciation as applicable has been allowed.
• The assessee  will neither be required to maintain books of account under the provisions of section 44AA, nor required to get his accounts audited under the provisions of section 44AB, in respect of his income from truck business. However, even such an assessee should comply with the requirements of both sections 44AA and 44AB in respect of his businesses which are not covered by this scheme.

Income from the truck business, estimated in accordance with this provision, will be aggregated with other incomes of the assessee, from any other business or under other heads of income, in accordance with the normal provisions of the Act. Accordingly, all deductions under sections 80CCC to 80U and rebate under sections 88 and 88B will be available to the assessee, if the conditions therein are fulfilled.