44ae- presumptive taxation

148 views 3 replies

Challa Ram

7 Points Joined July 2016

A is the owner of 5 vehicles and he taken 3 vehicles on rent basis from B. C is one customer of A. C approached A and asked him to shift his goods from Kolkatta to Bangalore. By using of these 8 Vehicles A shifted goods of C and in return A received 100000.

Like that A shifted goods of D, E, F also.

Total Revenue earned from all these customer put together amounted 1500000.

A paid Hire charges to B amounted 500000

Other expenses(Not included Depreciation on own Vehicles) amounted to 100000

Depreciation on own vehicles amounted to 25000

Now my Question is

Whether the provisions of 44AE can be applicable while computing income of A ???????

If 44AE applicable, then what is the taxable income of A?????

If 44AE not applicable then How to compute PGBP income of A??????

Replies (3)

Suresh Pai S

Tax Consultant

1029 Points Joined March 2012

44AE can be adopted by A as he doesn't own more than 10 vehicles.

However 44AE will be applied to the 5 vehicles which is owned by A.

In such case you need to separate the income from own goods and rented goods on a reasonable basis as applicable (like weight of goods carried).

After separation, you can claim expenses for the income for which presumptive taxation is not adopted to arrive at the net profit.

For 5 vehicles, income as per 44AE can be declared.