Commission income & section 44ad

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Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2015 During financial year 2014-15, I had a total turnover of Rs.90.00 lac in retail trading. In addition, I had earned a commission income of Rs. 5.00 lac U/S.194H. I want to know whether I can declare my income U/s.44AD on turnover of Rs.95.00 lac or not ? Or should I show the income on 90.00 lac U/s.44AD and commission income separately : Please iadvise me.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 November 2015 44AD applies to Rs. 90 lakhs only, since commission doesn't come under 44AD.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2015 If I declare income on 90.00 lac U/S.44AD, how to show income on commission received ? Wheher, I should file ITR 4, showing income u/s.44AD separately and income on commission separately after claiming various expenses incurred against the commission receipts.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 November 2015 will have to disagree here. Sub-section (6) of section 44AD clearly states that 44AD doesn't apply to a person who is earning income in nature of commission or brokerage.

So the correct position should be that the assessee himself is ruled out of 44AD completely instead of excluding just the commission income.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2015 As such, treating my Turnover 95.00 lac and showing/deducting all the expenses incurred by me in ITR 4 will serve the purpose ?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 November 2015 Please see the following link in support of my inference.

https://caskumargupta.blogspot.in/2011/06/comprehensive-analysis-of-section-44ad.html

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 November 2015 sir, this link doesn't discuss the implication of 44AD(6) simply ruling out the person out of 44AD.

why not consider this link https://www.incometaxindia.gov.in/tutorials/13.%20tax%20on%20presumptive%20basis%20in%20case%20of%20certain%20eligible%20businesses.pdf

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