Clarification on section 44ab (with respect to 44ad)

This query is : Resolved

Rajendra (Querist)
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22 July 2013 Dear Professionals,

Request you to clarify my understanding of Sec 44AB (and 44AD)

Clause (d) of Section 44 AB reads as fallows;

"carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person 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 in any previous year,]"

Here INCOME means total income. So if an assessee is having following income, he need not to get his books of accounts audited despite off declaring less than 8% of turnover as business income;

- Income from business = 2,27,000
- Agriculture Income = 2,00,000 (which do not form part of total income)
- Chapter VI A deduction 30,000 (Again is not a part of total income)

Thank you

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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14 August 2013 Yes your analysis is correct. Since the TOTAL INCOME of the assessee DOES NOT exceed the maximum amount not chargeable to tax, he is NOT required to get his accounts audited even if he shows profit less than 8%.

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