Deductions if no records are maintained

This query is : Resolved

Dipak Gulhane (Querist)
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16 May 2012 Respected Experts,

My many clients have commision income (both incurance + non-insurance comision).

But none of my clients maintained records of any expenses.....There Income is above Taxable limit. Some have Even more than 25,00,000 Lacks.

So how should I calculate there Income....? How much expenses they can claim...? Also tell me as % of commision. What will be the case if A.O. take any objections.....?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 May 2012 In cases where the gross receipts exceed Rs. 10 lakhs, it is MANDATORY to maintain books of accounts.

Also in case where the income exceeds Rs. 1,20,000 it is mandatory to maintain books of accounts.

So books of accounts will have to be maintained for filing income tax return.

P&L and B/sheet will have to be filled up in the ITR.

You should therefore, first ask them to maintain books of accounts. Only then you can file the return.

CA. Ramiz M. Rather

CA. Ramiz M. Rather (Expert)
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17 May 2012 I think if income of ur clients is under PGBP and gross receipts of your clients is below 60 lakhs u need to just Show 8% income under section 44AD (Amended)and there is no need to maintain books under section 44AA.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 May 2012 Dear CA Ramiz, kindly note that Finance Bill 2012 has retrospectively amended Section 44AD to provide that Section 44AD is NOT APPLICABLE to commission or agency income.

Accordingly, in this case, benfit of Section 44AD CANNOT be availed.

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