Sec 44 ad

This query is : Resolved

CA.S.KARTHIKEYAN

CA.S.KARTHIKEYAN (Querist)
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20 March 2012 A person is doing Retail trade whose businees turnover is Rs.35,00,000/- so he can opt for Sec 44 AD so profit of business as per sec comes to Rs.2,80,000/-(35 L of 8% )But assesse maintains Books of Account and his profit comes as per books is Rs.550000 after debting income tax of Rs.100000/- since assesse declare Rs.550000/-as income, whether he want disallow 100000/- or since he declare more than 8 % already he want to disallow 1 lakh compuslory as per any provisions because sec 44 AD defines that no further disallowance is requried if opts more than 8 % .

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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20 March 2012 No need to disallow Rs.100000, since he declared more than 8%. If you want to opt for normal provisions to maintain book of accounts for accuracy , that amount will be disallowed..

If you go pure financially to save tax choose 44AD, otherwise pay tax under normal provisions.

Here, in your case turnover is not so high , you can opt u/s 44AD.

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CA. Nitin Agrawal

CA. Nitin Agrawal (Expert)
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20 March 2012 If sec 44AD opt then there will be no deduction allowed except remuneration & interest being paid to the partners.

Further income tax in not allowed as deduction to the assessee. So in your case you should show income earned Rs 5.50 Lacs i.e more then 8% of Turnover.

One matter arises whether an assessee who maintain books of accounts and having income more then 8% of turnover, does in this case also he can show 8% as profit?

Does it does not create problem at the time of assessment by the A.O??? Other experts opinion sought in this matter?
Pls advice/comment.....

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