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Income tax on sale of agri produce

vaibhav (student) (220 Points)

16 February 2017

Dear Experts, I am dealing in a business where i buy maze from local farmers in our town & I sell them to agency located near to our village. My yearly turnover is more than 1 Cr. But if we look into the substance I hardly earn 4-5 Lakh. P.A. So my querry is how should I disclose my income in ITR? Does my business fit into the definition of Kaccha Arthiya? For FY 14-15 & 15-16 I have not at all maintained any books of account neither i have credits into my bank account ( Pure cash transactions). for FY 16-17 (Post demonitisation) i have started maintaining books of account. Kindly guide me to file my IT Returns.

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13 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160688 Points)
Replied 16 February 2017

As per your transaction mode its not Katcha arhatiya. You will have to prepare accounts and get then audited as your profits are less 8%. You will have to file ITR 4.

vaibhav (student) (220 Points)
Replied 16 February 2017

Thank you sir. Is there any way to file return without audit?

vaibhav (student) (220 Points)
Replied 16 February 2017

Thank you sir. Is there any way to file return without audit?

vaibhav (student) (220 Points)
Replied 16 February 2017

Thank you sir. Is there any way to file return without audit?

vaibhav (student) (220 Points)
Replied 16 February 2017

Thank you sir. Is there any way to file return without audit?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160688 Points)
Replied 16 February 2017

The way out is assessing income u/s. 44AD with just 8% (6% for digital receipts) profit upto turnover of 2 Crs. No need to maintain books of accounts.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160688 Points)
Replied 17 February 2017

Even bifurcating business in two operations one as commission (katcha arhatiya) and another direct trading (pucca arhatiya) can reduce turnover to great extent.

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vaibhav (student) (220 Points)
Replied 18 February 2017

is it not required to get audited if I opt for 44AD? I dont have purchase patti (bills) for FY 14-15, 15-16. I am thinking to make new pattis for the said years now & accordingly assess the income. My product (maze) is exempted in karnataka vat so shall i get my returns filed now 7 then on that basis assess the income under 44AD?

Kindly guide me sir.

vaibhav (student) (220 Points)
Replied 18 February 2017

Sir,

Thanks for guiding me. I read section 44AD but found that this is not applicable to agency &business earning brokerage ( comission) income.

Still ist advisible to file return under 44AD?

Tapan das (student) (23 Points)
Replied 18 February 2017

if I construct One flat rs 1 lakh in 1980 and sale it 33lakhs in nov16, what is tax treatment. kindly guide me Sir

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160688 Points)
Replied 19 February 2017

@ Vaibhav : as yours transactions are not of commission nature, but as trading/business, section 44AD can be applied if turnover below 1 Cr. (for previous years), but you will have to declare minimum 8% profit.

1 Like