Net profit rate
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 August 2012
Dear Sir,
One of my client whose turnover was 56 lacs in AY 2011-12 and opted sec. 44 AD by declaring net profit of Rs. 455000/-. Also in AY 2010-11 he did the same and maintained no accounts except bill book. However in AY 2012-13 his turnover is Rs 96 lacs, therefore he can not opt Section 44AD. If he holds the net profit @8% also this year, this would raise his tax liability upto 90000/-, therefore he decided to declare net profit @5%.
Now please please advise me, what excuse can be taken if department cites the net profit rate of previous years.
Thanking you.
One of my client whose turnover was 56 lacs in AY 2011-12 and opted sec. 44 AD by declaring net profit of Rs. 455000/-. Also in AY 2010-11 he did the same and maintained no accounts except bill book. However in AY 2012-13 his turnover is Rs 96 lacs, therefore he can not opt Section 44AD. If he holds the net profit @8% also this year, this would raise his tax liability upto 90000/-, therefore he decided to declare net profit @5%.
Now please please advise me, what excuse can be taken if department cites the net profit rate of previous years.
Thanking you.
Prakash Kochar
(Expert)
27 August 2012
For Ay 2012-13 he has to maintain the books of accounts and get accounts audited if his net income is below 8%. Question may not arise as deemed income was declared u/s. 44AD but for AY 12-13 books are maintained and actual income is shown as per books maintained.
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