Looking for expert help with Income tax for truck owners and transporters India? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Key Takeaways
- Own 10 or fewer goods carriages all year? Section 44AE fixes your income: Rs 1,000 per ton of gross vehicle weight (GVW) a month for trucks above 12,000 kg, and Rs 7,500 a month for lighter goods vehicles.
- You can't deduct diesel, driver wages, tolls or EMIs from that figure. Declaring less than the 44AE amount means keeping books and getting a tax audit.
- Give each customer a Section 194C(6) declaration with your PAN, and they won't deduct TDS on your freight.
- Plain truck hire is exempt from GST. Once you issue a lorry receipt you're a goods transport agency (GTA): 5% under reverse charge or 5%/18% under forward charge.
- File ITR-4 by 31 August 2026 for AY 2026-27 if you are on Section 44AE and no audit applies.
How much income tax does a truck owner pay in India? A truck owner with up to 10 goods carriages can use Section 44AE of the Income-tax Act 1961. Income is deemed at Rs 1,000 per ton of GVW a month for a vehicle above 12,000 kg, or Rs 7,500 a month for a lighter one, and tax is charged at normal slab rates. One 28-ton truck owned all year gives Rs 3,36,000 of income, which is nil tax under the new regime.
Most truck owners we speak to have the same three worries. How much income should I show? Why is my customer cutting TDS from my freight bill? And do I need GST? The answers depend on how many trucks you own, and on whether you issue your own lorry receipts or just hire out the vehicle. This guide covers owner-drivers, small fleet owners, fleets above 10 trucks and salaried drivers, for the return due this year (FY 2025-26, AY 2026-27). For the section itself in more depth, see our Section 44AE guide.
How much income do you declare under Section 44AE?
You don't add up freight and subtract costs. You count vehicles and months (Section 44AE(2), Income-tax Act 1961).
Tax Rate Chart
Section 44AE Deemed Income per Vehicle (FY 2025-26)
For every month or part of a month the vehicle is owned
Heavy goods vehicle (GVW above 12,000 kg)
Per ton of gross vehicle weight or unladen weight, per month
Any other goods vehicle (12,000 kg or less)
Per vehicle, per month
Source: Section 44AE(2) and Explanation, Income-tax Act 1961
Four rules trip people up:
- The 10-vehicle test is "at any time". Own 11 goods carriages for even a few days and the scheme is gone for that year (Section 44AE(1)).
- A financed truck is yours. A vehicle on hire purchase or instalments, with money still due, counts as owned by you (Explanation to Section 44AE).
- Part of a month is a full month. Buy a truck on 28 November and November counts.
- Only goods carriages qualify. Buses, taxis and autos are outside Section 44AE.
The deemed figure already covers diesel, tyres, driver salary, tolls, repairs and depreciation, so none of those can be claimed on top. A partnership firm can still deduct salary and interest paid to partners, within the limits of Section 40(b). If you really earned more, you declare the higher amount.
Example 1: owner-driver with one truck. Ramesh owns one 10-wheeler with a 28-ton GVW (28,000 kg) for all 12 months of FY 2025-26 and has no other income.
44AE income = 28 x Rs 1,000 x 12 = Rs 3,36,000. Under the new regime the first Rs 4 lakh is taxed at 0%, so his tax is nil. He still files ITR-4, which also records his vehicle details and lets him claim a refund if any TDS was cut.
Example 2: small fleet, new regime. Suresh owns three 28-ton trucks all year, two light goods vehicles all year, and buys a fourth 28-ton truck on 20 November 2025. He also has Rs 20,000 of bank interest.
Comparison
Suresh's Section 44AE Income, FY 2025-26
| Vehicles | Working | Deemed income |
|---|---|---|
| 3 heavy trucks, 28 tons, 12 months | 3 x 28 x Rs 1,000 x 12 | Rs 10,08,000 |
| 2 light goods vehicles, 12 months | 2 x Rs 7,500 x 12 | Rs 1,80,000 |
| 1 heavy truck, 28 tons, Nov to Mar (5 months) | 28 x Rs 1,000 x 5 | Rs 1,40,000 |
| Total business income | Rs 13,28,000 |
Source: Section 44AE(2), Income-tax Act 1961
Total income with interest is Rs 13,48,000. New regime tax: 5% on Rs 4-8 lakh (Rs 20,000), 10% on Rs 8-12 lakh (Rs 40,000) and 15% on the Rs 1,48,000 above Rs 12 lakh (Rs 22,200), so Rs 82,200. The Section 87A rebate doesn't apply above Rs 12 lakh, and marginal relief doesn't either, because the tax is less than the Rs 1,48,000 of income above Rs 12 lakh. Add 4% cess (Rs 3,288): Rs 85,488.
Suresh has six vehicles, so he stays inside the 10-vehicle limit even after buying the fourth heavy truck.
What happens if you declare less, or own more than 10 trucks?
Say a bad year left your real profit below the 44AE figure. You can declare the lower actual profit, but you then have to keep books of account (Section 44AA) and get them audited (Section 44AB(c)). The audit applies whatever your turnover.
A fleet of 11 or more trucks computes real profit: freight received minus diesel, driver wages, tolls, tyres, repairs, insurance, permit fees and interest on vehicle loans. Tax audit under Section 44AB applies above Rs 1 crore of turnover, or above Rs 10 crore if cash receipts and cash payments are each within 5% of the total.
Two rules matter most for these fleets:
- Depreciation. Motor lorries used in a business of running them on hire are depreciated at 30% on written down value (Appendix I, Income-tax Rules). A truck put to use for less than 180 days in the year gets half that (Section 32(1), second proviso). A Rs 40,00,000 truck first used on 10 November 2025 has been in use 142 days by 31 March, so it gets 15%, or Rs 6,00,000, in FY 2025-26.
- Cash payments. A cash payment above Rs 10,000 to one person in a day is disallowed (Section 40A(3)). For payments for plying, hiring or leasing goods carriages, such as hire charges to another truck owner, the limit is Rs 35,000. Diesel bought in cash falls under the normal Rs 10,000 limit, so pay pumps by card, UPI or fleet card.
Why is your customer cutting TDS from your freight?
Freight for carrying goods is a contract payment under Section 194C. A business paying you deducts 1% if you're an individual or HUF, or 2% if you're a firm or company. It starts once a single bill is above Rs 30,000 or the year's total from that payer is above Rs 1 lakh.
Small transporters can stop this. Under Section 194C(6), no TDS is deducted if you're in the business of plying, hiring or leasing goods carriages, own ten or fewer goods carriages at any time in the year, and give the payer a declaration saying so, with your PAN. Give a fresh declaration to each regular customer every year. If TDS was still deducted, it shows in your Form 26AS and you claim it back in your ITR.
For payments made on or after 1 April 2026, contractor TDS sits in Section 393(1) of the Income-tax Act 2025, with the same rates and thresholds. Our TDS on freight guide covers the payer's side.
Do you need GST?
It turns on one question: do you issue a consignment note (lorry receipt, bilty or LR)? A person who transports goods by road and issues a consignment note is a goods transport agency (GTA) under Notification 11/2017-Central Tax (Rate), as amended by Notification 15/2025.
No consignment note: Transport of goods by road is exempt, except when supplied by a GTA or courier (Notification 12/2017-Central Tax (Rate), entry 18). Giving your truck on hire to a GTA is also exempt (entry 22(b)). If all you supply is exempt, you don't have to register (Section 23(1)(a), CGST Act 2017).
You are a GTA: By default, GST is paid by the customer under reverse charge at 5% when the customer is a factory, society, co-operative, GST-registered person, body corporate, partnership firm or casual taxable person (Notification 13/2017-Central Tax (Rate), entry 1). GTA services to other unregistered persons are exempt (Notification 12/2017, entry 21A).
You can instead opt to pay GST yourself under forward charge by filing an Annexure V declaration before the financial year. You then charge either 5% with no input tax credit (ITC), or 18% with full ITC. The 18% option was 12% until 21 September 2025; Notification 15/2025-Central Tax (Rate) raised it from 22 September 2025. For the full GTA rules, see our GST on transportation guide. If you need a GSTIN or monthly returns, see our GST registration service and GST return filing service.
Salaried truck drivers
If you drive for a transporter on a monthly salary, your pay is salary income. Your employer deducts TDS under Section 192 only if your yearly tax works out above nil. Under the new regime you get a Rs 75,000 standard deduction, and the Section 87A rebate brings tax to nil if taxable income is up to Rs 12 lakh. So a salary up to Rs 12.75 lakh with no other income pays no tax. File ITR-1 if you're a resident with income up to Rs 50 lakh, especially to claim back any TDS.
Which ITR form, and by when?
Step-by-Step Guide
Filing Your AY 2026-27 Return as a Transporter
Count your goods carriages
10 or fewer at every point in FY 2025-26, including financed trucks? Section 44AE is open to you.
Work out deemed income
Rs 1,000 per ton of GVW a month for trucks above 12,000 kg, Rs 7,500 a month for the rest. Declare more if you earned more.
Pick the form
ITR-4 for a resident individual, HUF or firm (not LLP) on Section 44AE with total income up to Rs 50 lakh. ITR-3 for an individual keeping books; ITR-5 for a firm on books.
Match TDS
Check Form 26AS and AIS for TDS cut by customers under Section 194C and claim it in the return.
File on time
31 August 2026 for non-audit ITR-3 and ITR-4. 31 October 2026 if a tax audit applies.
Source: Sections 44AE, 44AB and 139(1), Income-tax Act 1961; ITR-4 instructions AY 2026-27
Advance tax is due if your tax for the year is Rs 10,000 or more (Section 208). The single-instalment rule by 15 March covers only Sections 44AD and 44ADA (Section 211). A Section 44AE owner pays in four instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Suresh in Example 2 should pay his Rs 85,488 this way.
Common mistakes transporters make
- Deducting diesel and EMIs from 44AE income. The deemed amount is already net of every running cost. Claiming expenses on top is not allowed (Section 44AE).
- Losing count of vehicles. Buying the 11th truck in February takes the whole year out of Section 44AE, not just February and March.
- Issuing LRs without knowing you've become a GTA. A lorry receipt changes your GST position. Decide on reverse charge or forward charge before the year starts, not when a customer asks.
- Not collecting back TDS. Customers who don't get your 194C(6) declaration will cut 1% or 2%. It is your money; claim it in your return.
How Tax Garden helps
We work out your Section 44AE income from your vehicle list and RC dates, file ITR-4 or ITR-3, and claim back the TDS your customers deducted. See our ITR filing service and pricing. If you run a GTA, we file your GST returns and the Annexure V option for the year.
