Sec. 44ad presumptive taxation [clarification]

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This query is : Resolved

CA.SHAHZAD SAYYED (Querist)

16 August 2011 Dear Senior Colleagues

kindly clarify following point

1) if a person having Turnover from Trading Business Rs. 31 Lac and also maintain all Books as prescribed u/s 44AA need not show profit at 8% because he is not opting Presumptive taxation for computation of income.

Some of Income Tax Practitioner are of the opinion that-

all Business cover under this section and even if assessee maintaining books of A/c he has to show profit at least 8% , if he is showing profit less than 8% then he has to keep Books of A/c and also need to get his books of A/c audited

My Views are

1) Presumtive Taxation viz 44AD, 44AE are special Provision which are optional and not the mandatory.

2) if any taxpayer keeping books of A/cs and and wants normal provision of taxation then he is free to show any percentage of profit might be lower than 8% or more

U S Sharma

U S Sharma (Expert)

16 August 2011 44AD/44AE are provisions only, nor mandatory for assessee to avail, however if the business turnover vs profit declared is less then 8% then audit u/s 44AB has to be conducted, otherwise the file would get selected for scurtiny. (not applicable if the
gross income is below taxable limit in case of individual/ HUF)

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

16 August 2011 In view of the definition of 'eligible assessee' and 'eligible business' section 44AD seems to be mandatory in nature. Whereas the profit percentage viz., 8%, 8% is discretionary subject to the satisfaction of other conditions mentioned in clause (2) to (5) of the said section.

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