Regarding 44ae
Querist : Anonymous
I have to file return in 44AE, so whether I have to fill gross receipt or net receipt after expenses in income.
If i am filing my return in 44AE more tax is coming, so can I show the Income in normal Business Income, after claiming all deductions for expenses. so that tax liability will be reduced.
44AE is optional. You can opt normal method if you so wish provided you have to
maintain books of accounts as specified under section 44AA and get the books
audited under section 44AB.
Querist : Anonymous
Querist : Anonymous
Sir Suppose my Total Freight without deducting any exp for the year is approx 14 lacs and if I show my monthly Income as 14 lac /12 = 116000, Tax liability will be very high. so can I deduct expenses from this and then show in 44AE ?
Querist : Anonymous
Sir, kindly help me with this.
1. Gross Receipts or Net Receipts?
You cannot deduct expenses under Section 44AE.
Income is presumed at a fixed rate per vehicle per month irrespective of actual expenses.
You have to declare income based on number of vehicles and months, using prescribed rates (e.g., ₹7,500 or ₹1,000 per month per vehicle depending on vehicle type).
2. Can you show income after expenses under 44AE?
No. Section 44AE does not allow any deduction for expenses like fuel, repairs, salaries, etc.
The whole idea is to simplify tax by taxing presumed income.
3. Can you opt out of 44AE and show actual income with expenses?
Yes, you can choose NOT to opt for presumptive taxation and declare actual income and expenses under normal business income (I.e., under regular income tax provisions).
In that case, you must maintain books of accounts and get them audited if turnover crosses prescribed limits.
4. What if you file under 44AE and calculate monthly income as total freight / 12?
That’s not correct because 44AE income is not based on gross receipts but on a fixed presumptive amount per vehicle per month.
The tax liability might seem high because you are taxed on presumptive income regardless of actual expenses.
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