Presumptive taxation

Originally posted by : Tarun jain
	1 Who carrying benefits under 44ad having no tax liability not maintaining any single paper of any receipt is there any problem in it, also guide for filling itr4s what paper work (like maintaining reciepts book or computation etc) should be done.

Dear, where from you bought 'no tax liability u/s. 44AD?

No books keeping, not to maintain other vouchers/receipts etc; but responsiblty to prove turnover lies on assessee. So, bank statements and related papers are required to be maintain.

Dear sir, thanx for the ans. the 90% recipts of bussines are in cash mode but divided in small amounts so what can be done to prov turnover.

How much is turnover by cash during the year?

Between 8 to 10 Lacs 

Between 8 to 10 Lacs 

I Hope this example will resolve all your queries....

Mr. X has turnover of Rs.100 Lacs. He informs that his income is only Rs.1,20,000.

Whether he needs to 1. maintain the books of account

2. Audit his accounts

3. Furnish the return of income.

In case if he does not maintain books of account, does not get his accounts audited and does not furnish the return of income, what will be the consequences ?

Upon plain reading of sections 44AA (2) (iv), 44AB (d) and 44AD(5) and from some of the experts view “that an assessee with turnover below 100 Lacs, who shows an income below the presumptive rate prescribed under the provisions, will in case his total income exceeds the taxable limit, be required to maintain books of accounts as per section 44AA(2) and also get them audited and furnish a report of each such audit as required under section 44AB ”.

Basing upon the above consideration in respect of the above case, he is not required to maintain books of account, not required to get audit of his accounts and not required to furnish the return of income. (This opinion is not authentic and please do not base upon this opinion for decision making)

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.

No Books: – In all other cases.

For such small turnover, practically there should not be any problem when done in cash.