44 ad - presumptive tax

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Nirav (Querist)
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10 March 2016 there was a query for Section 44AD -which no one is able to answer satisfactorily

if I have an eligible trading (plastics) business with turnover below 1 Cr

Q1: whether i can declare profit @ 8% even though my actual margin may be say 50%

if all sales receipts -(say 99 lacs) are by cheque and all purchase payments (say 50 lacs) are by cheque and other admin expenses (say 5 lacs) are also by cheque

so total net profit accumulated in bank is Rs. 44 lacs

Q2: since in above -case i have declared profit @ 8% -say Rs. 8 lacs and assets showing in my bank - Rs. 44 lacs - can AO - add 36 lacs (44-8) as assets disproportionate to income

Q3: whether it is an OBLIGATION to declare higher income - if I am maintaining books of accounts for other purposes; and profit as per my books is higher than presumptive income

Kindly see if you can take time to answer above query when you are free

Thanks for your time