Firm chit commission Income

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This discussion clarifies that commission income from a chit business cannot be offered under presumptive taxation (Section 44AD). If your firm maintains books of accounts and has gross commission receipts below £600,000, a tax audit is not required, regardless of the profit margin. The market trend for profit is noted to be around 25%.

Vinodita Peela

Vinodita Peela (Querist)
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12 October 2021 Whether the chit commission received from business of chits can be offered at 8% profit?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 October 2021 No. Commission income is not eligible for presumptive assessment u/s. 44AD.

Vinodita Peela

Vinodita Peela (Querist)
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12 October 2021 Chit business firm is maintaining books of accounts with gross receipts below Rs.600,000 commission . How much income is to be offered without conducting tax audit?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 October 2021 There is no condition for profit margin, when income is commission in nature.
For 6 lakhs commission receipt whatever profit be, tax audit is not applicable.
Market trend is about 25%.

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