Consideration % of profit u/s 44ab

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MANJUNATHA (Querist)

18 March 2014 if the turnover is below 1cr the income declared should be higherthan 8%.

As per the regular books of accounts maintained:
(as per the profit and loss account)
my total turnover is Rs.75.00 lakhs
Expenses before dep dr to P&L Rs.(68.05) Lakhs
Depn on computers debited @ 10% (Rs.0.80) Lakhs
(book value 8.00 lakhs)
Net profit as per P& L Rs.6.15 Lakhs
(after all the expenses and dep debited to P&L)

Question:
In statement of Income computation sheet
Net Profit Rs.6.15 Lakhs
Add: Dep @ 10% dr Rs.0.80 Lakhs
--------
Rs.6.95 Lakhs
Less : Dep allowed 60%Rs.4.80 Lakhs
--------
N/P chargeable to tax Rs.2.15 Lakhs

whether the section 44AB is applicable because the ultimate N/p rs.2.15 Lakhs falls below 8%.
or
44AB does not apply because the n/p as per P&L Rs.6.15 Lakhs is 8.20%

can i submit the above return without 44AB.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

18 March 2014 1. Section 44AB provides that a sum equal to 8% of the total turnover shall be deemed to be the PROFITS and GAINS of business chargeable to tax under the head "Profits and gains of business or profession

2. In simple words the NET INCOME should be 8%

3. In your case the net income is less than 8%. Accordingly, you have to get your accounts audited.

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