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Urgernt query of 44ae

Riddhi (CA Job) (34 Points)

21 February 2013

My client is a doctor & getting salary from one of the reputed hospitals. He has purchased ambulance this year to make it available on rent.

My query is whether income from ambulance is covered under section 44AE on presumtive taxation ie whether ambulance is 'vehicle' under "Motors Vehicle Act" & Whether we are using ambulance for goods carriages..

If 44AE is not applicable then how should we calculate the income? Is it necessary to make balance sheet? Please reply...

Thanks in advance

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4 Replies

CA MANISH AGRAWAL (Practice) (539 Points)
Replied 21 February 2013

The is separated calculation for profrssional and business income.The income og ambulance is trated as other head income or business income normanl or PTS u/s 44AD .

Riddhi (CA Job) (34 Points)
Replied 21 February 2013

It means 44AE is not apllicable but it covers under 44AD...Is it correct?

CA Harish Negi (Never Say Die) (860 Points)
Replied 21 February 2013

SECTION 44AE IS REPRODUCED HERE FOR YOUR REFERENCE

44AE. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, who owns not more than ten goods carriages 98[at any time during the previous year] and who is engaged in the business of plying, hiring or leasing such goods carriages, the income of such business chargeable to tax under the head “Profits and gains of business or profession” shall be deemed to be the aggregate of the profits and gains, from all the goods carriages owned by him in the previous year, computed in accordance with the provisions of sub-section (2).

Hence 44 AE is not applicable for you as the Ambulence is not GOODS CARRIAGE

Better you charge it under income from Other SOurces or Income form B & P.

GOOD LUCK

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 21 February 2013

Dear Riddhi, In my view, 44AE is not applicable. Under 44AD, a 'PERSON' carrying on profession as referred to in sec 44AA(1) is not eligible to take any benefit u/s 44AD. And medical profession is one of the specified profession as above (Rule 6F). So, strictly speaking, 44AD is also not available. However, in my view, Renting of Ambulance is a distinct business other than medical profession and benefit u/s 44AD may be availed. Regards, tax2001-it @ yahoo.com