To provide relief to persons who are engaged in the business of plying, hiring or leasing goods carriages Section 44 AE was introduced. The assessee opting this provision will not be required to maintain books of accounts.
1. This section is applicable only on those persons who are engaged in the business of plying, hiring or leasing goods carriages and who own not more than 10 such goods carriages.
2. This section has fixed monthly income chargeable to tax as business profit in respect of each type of vehicle which is as under :
(i) For a heavy good vehicle. The profits and gains shall be an amount to 1,000 per ton of gross vehicle weight or unladen weight, as the case may be, for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year or an amount claimed to have been actually earned from such vehicle, whichever is higher.
(ii) For a goods carriage other than a heavy vehicle. The profits and gains shall be an amount equal to seven thousand five hundred rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or an amount claimed to have been actually earned from such goods carriage, whichever is higher.
3. In case presumptive income per vehicle per month is adopted, it will be presumed that all the expenses u/s 30 to 38 have been changed.
4. In case assessee is a firm. The remuneration allowable u/s 40(b) shall be deducted out of income computed u/s 44AD(1) (point 2 above).
5. It will also be presumed that full depreciation has been calculated and deducted for calculating written down value of the assets.
6. Assessee can claim deductions under section 80.
7. The provisions of Section 44 AA and 44 AB shall not be applicable on such business and for calculating monetary limits the gross receipts or the income shall not be considered.
8. The assessee may or may not apt for this scheme. In case he does not opt for this scheme he shall be required to maintain accounts and get them audited.
9. In case of a partnership firm, being a partnership firm, can claim further deduction of remuneration and interest to its partners within the limit specified under section 40(b). Hence it can be said that in case of an assessee being a partnership firm, separate deduction from the net income computed as per presumptive taxation scheme in respect of remuneration and interest paid to partners is allowed.
It is to be noted that under this section the applicability is not based on turnover (as was in section 44AD and 44ADA) but it is based on the number of vehicles owned by the assessee.
Also, If the actual income is higher than the presumptive rate, i.e., higher than Rs. 1,000 / Rs. 7,500, then such higher income can be declared.
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