Sec 44ada

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Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2016 Dear Experts
In AY 2017-18 my turover shall be estimated 40 Lakh. Pls clarify u/s 44ADA how much tax will be paid on 40 Lakh and which expenditure is allowable?

Thanks In Advance.....

ROSHAN

ROSHAN (Expert)

27 November 2016 With Regard to your query, Below is the Example for you to understand SEC 44AD.
Assumptions: 1) Status of the Concern is a Partnership Firm.
2) Concern is Carrying out an eligible business.
3) Person/Concern is an eligible Assessee.

Profit from Business U/s 44AD
Particulars Amount
44 AD ( Say the turnover is Rs.40 lacs) then the income would be 8% 3,20,000
Less:

Interest allowable u/s 40(b) 1,00,000
Remuneration to partners allowable 1,00,000

Total Income of the Firm U/s. 44AD 1,20,000

Apart from Interest & Remuneration to Partners, all other Expenses are deemed to be allowed.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

27 November 2016 U/s 44DA You have to declare minimum profit of 50% of turnover. Out of your turnover of 40 lacs you have to declare a profit of 20 lacs by allowing 20 lacs expenditure and pay tax on 20 lacs.

Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2016 I agree with seetharaman sir who has correctly interpreted the sec 44ADA however Roshan sir has also correctly interpreted the sec 44AD with an example. For that Thanks A Lot To both of you......................................
since my query was pertain to section 44ADA wherein i have to declare the
profit of 20 Lakh. Pls let me know on declaration of 50% profit weather any expenditure shall be allowable or not?
can i avail the exemption of 250000 and deduction of 80C & 24B?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

28 November 2016 No further expenditure is allowed. You can avail basic exemption of 2.50 lacs and deduction u/s 80C and 24B.

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