Section 44ad

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Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2015 Respected Sir,
1) Can a person having a shop of cloth store, resaler of cloth, file his return u/s 44AD, ITR 4S. By showing net profit above 8% for the AY 2014-15.
2) Is it mandatory to keep books of accounts, having turnover 90 lakh.
If yes then ok but if no then please give case law.
Please do reply

CA R SEETHARAMAN online

CA R SEETHARAMAN online

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01 March 2015 1. He can file his return u/s 44AD, ITR 4S provided his turnover is less than 1 crore.
2. If he is declaring profit of 8% or more and turnover is less than 1 crore no books of accounts need to be maintained.

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Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2015 I agree with you Mr. Seetharaman but as per section 44AA The person/individual having income for more than Rs. 120000/- for three continuous year have to maintain books of Accounts as well as having turn over more than Rs. 10 Lakhs.
under such circumstances, The above advise given by you has been contested during the time of Scrutiny proceeding but ITO/Assessing Officer show me the Provisions of Section 44AA. and demanded Books of Account, failure to produce Books he may impose Penalty of Rs. 25000/-

Give some more light upon the query.
Thank You

CA R SEETHARAMAN online

CA R SEETHARAMAN online

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02 March 2015 Assessees covered u/s 44AD/44AE/44BB/44BBB are also required to maintain books if they claim that their income will be less than limit specified in respective section. e.g. u/s 44 AD limit is 8 % of Gross Receipt.

U/s Sec 44 AD maintenance of books is required when two conditions are satisfied:-
Claim lower profit than limit specified u/s 44AD
Total Income exceed basic exemption limit.

Querist : Anonymous

Querist : Anonymous (Querist)

04 March 2015 Dear Seetharaman Jee Then in a case of IT Scrutiny of a resaler of cloth the return of income was more than 8 % as well as the Gross Receipt was below 1 Crore then why the ITO/Assessing officer demanding the Books of Account.
Please give some case study relating to the issue so that it will be easy to prove the points specified by you.
Thank You.

CA R SEETHARAMAN online

CA R SEETHARAMAN online

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04 March 2015 ITO may be demanding books you may say it is not maintained as per IT Act.
See the link.
http://klaggarwal.com/direct-tax/simplifying-44aa44ab44ad/

Querist : Anonymous

Querist : Anonymous (Querist)

14 March 2015 Dear Seetharaman sir,
Sorry to disturb you, I have followed the link given by you and while reading that the liability of advance tax does not comes u/s 44AD, the income from Presumptive business.

Sec 207 - Liability for payment of Advance Tax.
Clause (2) The provisions of sub section(1) shall not apply to an individual resident of India, Who-
(a) does not have any income chargeable under "Profit and gains of business or profession",
My question is : Is there any different between "Profit and gains of business or profession" and "Presumptive Income" according to Income Tax Act.
As the Cloth Store is a business, but how to classify that the income earned from it is "Profit and gains of business or profession" or "Presumptive Income.
Please tell me definitions of it or sections.
Thank You Sir.

CA R SEETHARAMAN online

CA R SEETHARAMAN online

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15 March 2015 Classify it as presumptive income so that you can avoid advance tax and also no need to maintain books of accounts.

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Querist : Anonymous

Querist : Anonymous (Querist)

20 March 2015 As per your advice Seetaraman Sir, I have gone through section 44AD & 207 & 208 But i did not find anywhere that Advance tax is exemptbu/s 44AD, as the income earned by business or profession and tax exceeding Rs. 10000/- have to pay advance tax irrespective of filing return u/s 44AD, As well as 44AD is for business income and Advance Tax is exempt for person not having income from Head Business or Profession, and person above 65 years.But in my case it is income earned from Business and return is prepared u/s 44AD,
So can you please guide little more about the issue or any case study or case law.
Please reply ld. Expert.
Thank you.

CA R SEETHARAMAN online

CA R SEETHARAMAN online

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23 March 2015 If a person adopts the presumptive taxation scheme of section 44AD, then is he liable to pay advance tax in respect of income from business covered under section 44AD?
A person opting for the presumptive taxation scheme of section 44AD will not be liable to pay advance tax in respect of income from business covered under section 44AD.

See the link.
http://taxguru.in/income-tax/income-tax-provisions-related-to-presumptive-taxation-under-sections-44ad-44ae-and-44af-in-a-brief.html