Option of 8% nett profit
This query is : Resolved
10 March 2018
Respected Sirs. I have heard that if we opt 8% nett profit u/s 44-AD for the assessment year 2017-18 (Year ending March 17), we will have to maintain the same nett profit of 8% for the next five years also i.e for the coming assessment years Ay 19.20,21,22,23. Now the issue is as of high sales turnover. For example for the next assessment year if by the way the nett sales turnover exceeds Rs 2 crores, 8% nett profit will arrive as at 16 lacs and for a proprietor nett business profit of Rs 16 lacs will attract too much tax liability. Please guide me as I am not able to understand the logic behind that. What does the income tax department want to make us understand ?
10 March 2018
You have wrongly interpreted the provisions. You can declare less than 8% profit by opting out of 44AD any time but you can't opt for 44AD next 5 years once you opted out
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