Sec 40b and sec 44ad

This query is : Resolved

Sanket Shah (Querist)
Follow

09 August 2012 A partnership firm having turnover of Rs40 lacs and book profit of 1.5 lacs. However i want to show profit u/s 44AD @ 8% i.e. Rs3.2 lacs. In this on what amount will remuneration to partners u/s 40b will be calculated?
Note: Partnership deed provides for remuneration to be calculated as per provision of sec 40b

CA Amit Jaiswal

CA Amit Jaiswal (Expert)
Follow

09 August 2012 The partners remuneration is deductible from the profits subject to the limits u/s 40b.
The deductibility will be as per 40b only i.e. on book profits.

Sanket Shah

Sanket Shah (Querist)
Follow

10 August 2012 if profits are shown u/s 44AD, there is no requirement for maintenance of books of accounts. Hence no books and even P&L a/c is prepared. What will be book profit in this case?

Prakash Kochar

Prakash Kochar (Expert)
Follow

11 August 2012 Income u/s. 44AD will be 320000/- @8% of 40lacs. Out of this interest and remuneration as authorised by partnership deed will be allowed u/s. 40(b)and balance if any will be liable for tax in hand of firm.

CA Amit Jaiswal

CA Amit Jaiswal (Expert)
Follow

15 August 2012 Agreed with Mr. Prakash

Sanket Shah

Sanket Shah (Querist)
Follow

15 August 2012 How will the book profit be calculated? Note: No books of accounts are maintained

CA UMESHKUMAR R. ACHARYA

CA UMESHKUMAR R. ACHARYA (Expert)
Follow

16 August 2012 dear sanketji,

Section 44AD is a deeming section,
In other words when you opt to calculate profit under this section your profit will be deemed at fixed @ 8 % on sales whether you have maitained books or not.

You have make up your mind that book profit can be calculated only books are maitained but under section 44AD THIS IS NOT SO.

CA Amit Jaiswal

CA Amit Jaiswal (Expert)
Follow

16 August 2012 You will have to keep the details of turnover which will be the basis for sec 44AD and will be usefull in future.

CA Amit Jaiswal

CA Amit Jaiswal (Expert)
Follow

16 August 2012 You will have to keep the details of turnover which will be the basis for sec 44AD and will be usefull in future.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Jagdeep Kaur

RAVINDRA JOSHI

Jaipal Singh

AJAY Kumar Agrawal

CA K GIRIDHAR

Subscribe Now

Sec 40b and sec 44ad

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA