44aa & 44ad

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GOVIND BANSAL (Querist)
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28 September 2011 MY QESTION IS AFTER AMENDMENT IN FINANCE ACT 2010 , IF THE ASSESEE IS FILING RETURN CLAIMING BENIFIT OF 44AD IS HE LAIBLE TO MAINTAIN BOOKS OF ACCOUNTS U/S 44AA IF HE IS DECLARING MORE THAN 8% TURNOVER IS MORE THAN 10 LACS

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 September 2011 Section 44AD specifies the minimum %age of amount to be shown as profit. It does not specify the maximum amount to be shown as profit.

Further, Section 44AD provides that books of accounts are to be maintained and audit to be conducted only when the profit %age is LESS THAN 8%.

If you are showing a higher profit, there is no need to maintain books of account.

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 AFTER THE AMAENDMENT BY FINANCE ACT 2010 I THINK THE POSITION HAS CHANGED , THE BLANKET EXEMPTION GIVEN EARLIER HAS BEEN WITHDRWAN AS FAR AS 44AA IS CONCERNED

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 September 2011 I am not able to understand. Do you mean to say that if a person is showing profit more than 8%, he is liable to maintain books of accounts??

That is not correct. A person can show higher income without maintaining books of accounts.

The obligation to maintain books of accounts arises only when profit is shown less than 8%.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 September 2011 Clause (iv) of sub-section 2 of Section 44AA reads as under:

where the profits and gains from the business are deemed to be the profits and gains of the assessee under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax during such previous year.

It is clear from the above that books of accounts are required to be maintained only when the profits claimed are less than 8%.

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 KINDLY GIVE YOUR OPINION AFTER CONSIDERING THE CHANGES MADE IN FINANCE ACT 2010

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 September 2011 The provision stated is the current provision as amended by Finance Act, 2011.

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 WHAT ABOUT SUB CLUASE (i) , (ii) & (III) OF CALSUE 2 OF 44AA SAYS & CORRESPONDINGLY FROM 44AD THE BLANKET EXMPTION HAS BEEN WITHDRAWN

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 KINDLY LOOK INTO MATTER FRESH

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 September 2011 Kindly read Section 44AA carefully. After clause (i), clause (ii) and clause (iii) the word "OR" is written.

All the four clauses cannot be applicable simultaneously.

Further, where is it written that blanket expemption has been withdrawn?

Also, what exactly do you mean by blanket exemption?

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 KINDLY LOOK INTO MATTER FRESH

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 AS FOR AS "OR" IS CONCERNED THE ASSESEE IS COVERD U/S 44AA EITHER OF CLAUSE . & IN CASE GROSS RECIPT IS (TURNOVER IS MORE THAN 10 LACS & TOTAL INCCOME IS MORE THAN 1.2 LACS HE IS COVERED UNDER OTHER CLAUSES OF 44AA& TO MAINTAIN THE BOOKS.
AS FOR AS BLANKET EXEMPTION IS CONCERNED PREVIOUS TO FINACE ACT 2010 SEC 44 AF WAS APPLICABLE FOR RETAIL BUSINESS & SUB CLAUSE 4 OF SUCH 44 AF HAS GIVEN THE BLANKET EXPMTION IN SUCH CASES WHICH IS NOT PRESNT IN CURRENT 44 AD

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 KINDLY LOOK THE MATTER IN THE LIGHT OF ABOVE SUBMISIION

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 September 2011 The proviso to Section 44AD provides that books of accounts shall be maintained only when the income claimed is less than 8%.

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 would you please reproduce that proviso

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 would you please reproduce that proviso

GOVIND BANSAL

GOVIND BANSAL (Querist)
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28 September 2011 kindly have a look keeping in mind previous submission

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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29 September 2011 Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) 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.

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