Calculation of profit u/s 44ad
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 May 2014
Dear friends,
My friend is carrying on a business of jewellry. His main activity is to sell gold and silver ornaments and also prepare some new ornaments from gold bars.
While selling they collect making charges from the customer. They also paid making charges while purchasing the ornaments from wholesalers. They do not charge the vat on the making charges.
Now suppose they have sold ornaments worth Rs. 4000000/- during a year and collect Rs. 60000/- as making charges then while calculating profit u/s 44AD @ 8%, whether we have to include making charges of Rs. 60000 in total turnover or not. That is whether we have to show profit
4060000*8% = 324800
or
4000000*8% = 320000 + 60000 = 380000
Please solve the above query..
Thanks
My friend is carrying on a business of jewellry. His main activity is to sell gold and silver ornaments and also prepare some new ornaments from gold bars.
While selling they collect making charges from the customer. They also paid making charges while purchasing the ornaments from wholesalers. They do not charge the vat on the making charges.
Now suppose they have sold ornaments worth Rs. 4000000/- during a year and collect Rs. 60000/- as making charges then while calculating profit u/s 44AD @ 8%, whether we have to include making charges of Rs. 60000 in total turnover or not. That is whether we have to show profit
4060000*8% = 324800
or
4000000*8% = 320000 + 60000 = 380000
Please solve the above query..
Thanks
01 May 2014
Making charges will be included for calculating profit u/s 40AD i.e 4060000.
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