Sec 44ad
This query is : Resolved
03 July 2012
if one of my client partnership firm pay tax on income (calculated @ 8% on tournover) as per sec 44AD after applying partners remmuneration, as per books actually there is less profit , on which tax is payable, but to avoid audit burden they choose for sec 44AD, AS it is continuing firm from last ten years, how balances are carrie forward to next year in books of accounts, i mean is it necessary to adjust books to show profit @ 8% on tournover, as per books there is no such higher profit, how capital accounts and other opening balances are carryforward to next year.
As per sec 44AD, it is not necessary to maintain books of accounts for particular year, but in next year how opening balances of partner's capitals and other balances are appear in books of accounts
As per sec 44AD, it is not necessary to maintain books of accounts for particular year, but in next year how opening balances of partner's capitals and other balances are appear in books of accounts
04 July 2012
You have to understand that Income Tax Act does NOT govern books of accounts.
Treatment under Income Tax Act and accounting records may be different.
Section 44AD is a deeming section. It does not require books of accounts to be adjusted to match the income declared.
You will prepare books of accounts normally and carry forward the balances as per books of accounts.
Treatment under Income Tax Act and accounting records may be different.
Section 44AD is a deeming section. It does not require books of accounts to be adjusted to match the income declared.
You will prepare books of accounts normally and carry forward the balances as per books of accounts.
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