Profits and gains of business on presumptive basis
Notwithstanding anything contained in Sec. 28 to Sec.43C (that means deduction under these sections will not be allowed) in case of an eligible assessee (should not be a LLP or a Company) engaged in eligible business(not applicable on Profession) a sum equal to 8% of the total turnover or gross receipts of the assessee in the previous year on account of such business or as the case may be a such higher sum the assessee claims, shall be deemed to be the income under the head "Profit and gains of business and Profession."
Meaning of Eligible Business-
Eligible business means-
(i) any business except business of plying, hiring or leasing goods carriage and
(ii) whose total turnover or gross receipt does not exceed of Rs. 2 crore
Cannot be applied to-
(i) Profession (as 8% is very low profit for Profession so governed by sec 44ADA)
(ii) Income in nature of commission or brokerage
(iii) On agency business
Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to that previous year succeeding such previous year not in accordance with the provisions of sub section (1), he shall not be eligible to claim the benefit of the provision of this section for five assessment years subsequent to the assessment year relevant to the previous year in which profit has not been declared in accordance with the provisions of sub section(1). (Language of act)
Simply, If after declaring the profit as per Presumptive Basis, if an assessee declares profit lower than 8%, then for next 5 years we cannot opt for Presumptive Taxation, that is he has to maintain books of accounts and also required to tax audit if income exceeds maximum amount not chargeable to tax.
Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee to whom the provisions of sub-section (4) are applicable and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB
I will try to Correlate it with Section with Section 44 AB.
These are not bare acts.
Tags Income Tax