Presumptive income - accounting effect of depreciation

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Nikita Kulkarni (Querist)

31 March 2018 As per section 44AD an assesse opting for presumptive income cannot claim depreciation and has to reflect fixed assets at WDV , that is after deducting depreciation but what will be the accounting effect of depreciation while writing books of account?

Shrinivas (CA, LLB, CISA)

Shrinivas (CA, LLB, CISA) (Expert)

31 March 2018 The whole idea of opting for Presumptive taxation under Section 44AD is because you do not need to maintain books of accounts. Moreover, you cannot separately claim depreciation because it is deemed that expenses from Section 30 to 38 are allowed, when you agree to pay tax by declaring income at 8% or 6% as the case maybe.

Hope this clarifies.

RAJA P M

RAJA P M (Expert)

31 March 2018 As per Sec 44AD we can't claim depreciation on Fixed Assets and No more questions from ITD if we show the profit above 8%.

The same way No more restriction for accounting Purpose for anything Ourselves> You can depreciate and less the Asset value as per Your Books of Accounts...

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