Satvir Singh (Newly minted CA) (1733 Points)
08 October 2009A person has income from sole proprietor business (milk dairy), in the range of 3 lac to 3.5 lakh. The business has turnover of less than 30 lakh and doesnot maintain books of accounts. Is the firm liable to maintain proper accounts? I have also heard about a provision that if a firm has turnover under 40 lakh, profit can simply be taken as 5% of turnover. Please explain??
That ques u hv askd consists of 2 concepts..1)sec 44AA,2)44AF..
As per sec 44AA & ur ques-1st thing is that Mr. X is carrying a non-specified proffesion & his income is >1.2 lakh,also turnover is >10lakh.So,there is requirement of compulsory maintenance of books of accounts.
Again as per sec 44AF-Profit as 5% of profit ll b taken only if the assessee is engaged in "retail trade" & the turnover is <40 lakhs..
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