1Can a restaurant owner use the 44AD presumptive scheme?
Yes, if turnover is within Rs 2 crore (Rs 3 crore where cash is 5% or less). Declare 8% (6% on digital receipts) as income with no audit — but a thin-margin outlet may do better keeping books.
Running a restaurant or cafe means real costs, staff and GST to manage, and the tax saving comes from claiming everything legitimately and choosing the right scheme. Here's how restaurant owners can save tax and stay compliant.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-15
Quick answer
Restaurant owners earn business income — so the 44AD scheme, full expense and depreciation claims, GST discipline and advance tax are key. Here's how.
If your turnover is within Rs 2 crore (Rs 3 crore where cash receipts are 5% or less), Section 44AD lets you declare 8% of turnover (6% on digital receipts) as income with no audit and no detailed books. For a small outlet this can be simpler and lighter on tax — but a thin-margin business may do better on actual books.
If you keep books, deduct all real costs — raw material and supplies, staff wages, premises rent, utilities, kitchen equipment (through depreciation), packaging, delivery-platform commissions and marketing. In a low-margin business, actual expenses often beat the presumptive rate.
Restaurants deal with GST on sales and on many purchases; getting registration, the correct rate and input-tax-credit treatment right keeps you compliant and avoids penalties. This is separate from income tax but central to a food business.
Salary to a spouse or family member who genuinely works in the business is a deductible expense and can shift income to a lower slab — provided it's real, reasonable and documented, with TDS where applicable.
On your personal return, use 80C, the Rs 50,000 NPS and 80D health insurance in the old regime. With no TDS on business income, pay advance tax in the four instalments if your tax exceeds Rs 10,000, to avoid 234B/234C interest.
Yes, if turnover is within Rs 2 crore (Rs 3 crore where cash is 5% or less). Declare 8% (6% on digital receipts) as income with no audit — but a thin-margin outlet may do better keeping books.
Raw material, staff wages, rent, utilities, kitchen equipment (via depreciation), platform commissions and marketing , when you keep books. In a low-margin business these often beat the presumptive rate.
Yes — GST on sales and purchases is separate from income tax. Getting registration, the right rate and input-credit treatment correct keeps you compliant and avoids penalties.
Running a restaurant or cafe? Write to the firm and we'll get your scheme choice, GST and advance tax in order.