Schedule BP – Computation of Income from Business or Profession AY 2026-27

Schedule BP – Computation of Income from Business or Profession AY 2026-27

Schedule BP (computation of income from business or profession) is for taxpayers who earn income from a business or profession.

The purpose of Schedule BP is to compute the income under the head “Profits or Gains of Business or Profession.” It starts with the profit or loss as per the Profit and Loss (P&L) account. Then, various adjustments are made as per the provisions of the Income Tax Act, 1961. These adjustments include:

• Disallowable expenses: Expenses debited to the P&L account but not allowed as a deduction under the Act.
• Allowable expenses: Expenses not debited to the P&L account but eligible for deduction.
• Deemed incomes: Certain receipts are treated as income under specific sections.
• Depreciation: Adjustments related to depreciation as per the Income Tax Rules.
• Specific deductions: Deductions related to particular businesses or activities.

For taxpayers opting for presumptive taxation schemes (like Section 44AD, 44ADA, or 44AE), Schedule BP facilitates income declaration at presumptive rates.

Section 28 to 44DB of Income-tax Act, 1961

Income-tax Act contains provisions for computation of income from five different sources and income from business and profession is one of them. Part D of Chapter IV of the Income-tax Act, 1961, contains provisions for the computation of profits and gains of business or profession and the presumptive tax scheme.