44AD income tax

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This discussion clarifies the profit margin requirements under Section 44AD of the Income Tax Act. For cash receipts, a minimum profit of 8% is expected, while for banking transactions, it's 6%. Even if your overall profit ratio appears lower, declaring income based on these specified percentages for each receipt type should satisfy the tax authorities and prevent queries or notices.

Shahan

Shahan (Querist)

27 July 2023 10 lack receipt cash se hai aur 5 lacks banking se total profit 110k hai ab uska ration 7.33 araha hai ye 8 percentage ke neeche ja raha hai notice a sakta hai 10 lack ka 8% profit 80000 aur 5 lacks 30000
Total profit 110k but sir total ratio 7.33 araha hai please explain

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 July 2023 For cash receipts 8% while for Bank receipts 6% are minimum requirement, which are satisfied as per Sec. 44AD IT act. So, if you are declaring the income u/s. 44AD, no question of any query or defective notice.

Shahan

Shahan (Querist)

27 July 2023 But sir agar 8%aur 6% to Maine show krdiya uska total profit 8% ration ya usse above Jaye 44ad bolta hai

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 July 2023 Cash turnover margin is 8%, but for turnover through banking channel is 6%. Declare that minimum percentage; it will be accepted.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

12 September 2024 Good Luck.

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