Is switching to 44ad allowed?

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 November 2011 suppose assessee Mr.X is doing job work n his gross receipt during any previous year does not exceed 15 lac and he files his return shwong net profit around 40%. now Mr.X comes to know about the scheme of presumptive income u/s 44AD and now he have following querries...
1.Does he covers under the section 44AD?
2.If he covers then does he can opt the option of presumptive icomne as he was not opting this scheme earlier?(basically want to know whether depatment will allow or not )
3.Does he can avail slab rate as he proprietor(indivial)?
4.will deduction under chapter VIA allowed?

Aijaz Shaikh

Aijaz Shaikh (Expert)

20 November 2011 1) He is cover u/s 44AD.

2) He can opt for this scheme.

Note:
1. Under section 44AD an assessee has to show minimum net profit of 8% of his gross receipts.

2. There is no maximum limit of net profit he has to show.

3. Once he has filed the return of income, do not change it, by filing the revised return of income,Since it will result in changing in net profit and income, and it may result in penalty for furnishing inacurate particulars in return of income.

3) He can definetly avail slab rate.

4) Deduction under chapter VIA will be definetly allowed.

Message likes : 1 times

Vikas

Vikas (Expert)

21 November 2011 All your question's answer is yes. You can change and you have to show minimum of 8% profit on your turnover and not any maximum limit.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2011 1. Does department will object for opting presumptive income scheme in subsequent assessment year?

2.Does assessee need to write application to AO regarding switching over to presumptive income in subsequent years?

Vikas

Vikas (Expert)

22 November 2011 Both your answer is no. You can go ahead

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