Presumptive taxation u/s 44ad

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Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2012 My client is in the business of developing property. Till last year i.e. 2010-11 accounting year none of the flats were registered but on the basis of receipt has filed IT u/s 44AD as the receipts were less than than the limit. Now in the year 2011-12 accounting year he has recieved the balance amount which is less than 60 lacs but the flats registered is more than 60 lacs.
So in this year can they be covered U/S44AD or is the tax audit mandatory?

Amol S Joglekar

Amol S Joglekar (Expert)
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31 July 2012 In its true intent, closing WIP is covered in 44 AB contentions. It is, therefore, advisbale not to use 44 AD for developement business.

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2012 Can you explain the taxation method in details and is it mandatory for them to maintain accounts and get it audited?

Amol S Joglekar

Amol S Joglekar (Expert)
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31 July 2012 Yes. If it is above 60 lakh

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2012 Current year total value of flats registered is 65 lacs but out of that 65 lacs he has taken 25 lacs received in f.y. 2010-11 as reciepts and filed income and paid tax by taking profit as 8% so current year he should file it on the basis of entire 65 lacs or 40 lacs??

Amol S Joglekar

Amol S Joglekar (Expert)
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31 July 2012 assuming he is doing it on receipt basis.. he needs to take the receipts every year

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2012 Thanks but if you can kindly elaborate it? I mean whether he should take receipts as 40 lacs or 65 lacs?

And if its 40 lacs then whether he can take exemption of tax audit?

Amol S Joglekar

Amol S Joglekar (Expert)
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31 July 2012 While on receipt basis, you need to take the receipts irrespective of the fact that when the actual registration is done. You are going by receipt method. Calculate the receipts of financial year 2011-12, if the figure exceeds 60 lakh, then go for tax audit else follow the presumptive method as done by you in earlier year.

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Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2012 Thanks a lot for the reply!!:)

Amol S Joglekar

Amol S Joglekar (Expert)
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02 August 2012 you are most welcome.

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