Ref u/s 44ad of income tax act


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Querist : Anonymous

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Querist : Anonymous (Querist)
10 August 2011 My client having a Sales of Rs 38,93,000 for the year ending 31.03.2011. He is a Wholesaler of Biscuits. "NOT A RETAILER.". For a Turnover of Rs 100/- company gives him only 5% margin.But as per IT Act he has to declare 8%(44AD). How it can possible ? What i can do ? Tax may around Rs 15145/- or Audit Fee may @ 8500/- ? His monthly income is Rs 15000/-.

10 August 2011 Hi,
First of all, section 44AD is applicable to all eligible business whether it is retail or wholesale. Section 44AD is very clear, If you do n't want to declare 8% profit, get the accounts audited u/s 44AB. It is presumptive taxation and govt is preasumming that you have at least 8% profit from your business. If you are saying that it is not 8% and it is 5%, let auditor do his work and give his report u/s 44AB.

10 August 2011 Here He is required to get his account audit and can show the real profit.

Provisions are there in the act that if his total income is below the taxable limit he is not required to get his accounts audited. But due to controversy nobody will advise you to show the Actual Net Profit.
Otherwise, Gross Profit 195000-40000 =155000 will be his Taxable Income.

To avoid controversies, it is better to get accounts audited and file the return.

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Querist : Anonymous

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Querist : Anonymous (Querist)
10 August 2011 Hi
If he already filed return ? then he has to file revised return with the audit reports


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