Am i right for sec 44ad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 August 2012 Dear Sir,

plz suggest as m i right in that case.....Assessee is a partnership firm having share trading business (sub-broker), where no book are maintained..

Income from commission is = 400000
Profit as per sec 44AD(8% of40000) = 32000
less :salary (90 % of book profit) = 28800
less : intt. on capital = 1000
taxable income = 2200
tax on income = 660
cess = 20

total tax = 680

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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07 August 2012 Since the assessee is earning commission income, he is NOT covered u/s 44AD as commission income has been specifically excluded from Section 44AD.

He will have to file ITR 4.

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2012 need more reply

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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07 August 2012 Section 44AD has been retrospectively amended w.e.f AY 11-12 to provide that commission income is NOT covered u/s 44AD.

Accordingly, such assessee CANNOT avail benefit of Section 44AD.

They will have to compute taxable income as per the normal provisions of the Act.

Income less: expenses.

Querist : Anonymous

Querist : Anonymous (Querist)

08 August 2012 If i calculate taxable income as per normal provision i.e. Income less expenses..

so, plz clarify wheather audit is mandatory that.......
Income is 400000
Expense is 380000
Taxable income is 20000
Tax on Income is 6000

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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09 August 2012 Audit is NOT mandatory because gross receipts do not exceed the specified limit.

Querist : Anonymous

Querist : Anonymous (Querist)

09 August 2012 Thanks Siddhartha ji for reply, but still i am in confusion .......

why audit is not mandatory even i declare profit below 8% of receipt

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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09 August 2012 Audit is compulsory only if you are covered under Section 44AD.

Since you are NOT covered u/s 44AD that provision is not applicable.

Normal provision (Section 44AB) is applicable. So, audit is mandatory only if turnover exceeds the limit u/s 44AB.

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