Section 44

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2013 Suppose a person is running a coaching class where his income is tution fees only. The receipt is more and expense is very less. Suppose gross receipt is less than 40 Lacs in 2011-2012 and current f.y. 2012-2013. Can he choose presumtive income (8% of gross receipt)u/s 44-AD. IF yes then what happens if he was not knowing the provision of the fact and paid advance tax in the current year 2012-2013. Further, is he allowed to get refund if he has filed previous year 2011-2012 return. Please reply

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 February 2013 Dear Anonymous,

How is coaching classes covered under 44AD - SPECIAL PROVISION FOR COMPUTING PROFITS AND GAINS OF BUSINESS OF CIVIL CONSTRUCTION, ETC?

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Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2013 Dear Mr.Nikhil, Do you mean to say that sec-44AD is not applicable to coaching class bussiness ?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 February 2013 I am sorry. I read it wrong. Yes, you can claim 8% presumptive profit under 44AD.

Also, yes, you can claim the refund after filing the return.

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Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2013 Dear Mr.Nikhil, at present i am deeply understanding the section 44 AD in ca club wherein i have learnt that w.e.f 01.04.2010 all small businesses are covered. Now this coaching classes is run by a teacher and he has hired 4 to 5 teachers in it and paying salary. So i think it comes under a " business" rather than a profession. Can u flash some light on this. Isit called a "Business" or "Profession" since if it is called a profession then section 44 AD cant be applied. please reply

thanks in advance

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 February 2013 Dear Anonymous,

Whether you are covered under Section 44AD needs to be seen from the perspective of the definition of business as defined therein:

1. The professions excluded are those covered under 44AA. (according to my understanding you are not covered under 44AA)

2. Your income is not by the way commission or brokerage (so even this condition doesn't apply to your case)

3. You are not carrying agency business (so even this doesn't apply to your case)

4. Eligible business further means the one run by individual, HUF or partnership firm (since you are an individual, this condition is also not violated)

5. You are not carrying business of plying, hiring or goods carriage and your gross receipts are within the limit of Rs 60 Lakh.

So you are right that professions are excluded but only those professions as covered under 44AA.

If you need any help in filing the return. Do let me know.

Regards

Nikhil Kaushik

Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2013 Thanks Dear(MR.NIKHIL) for your valuable reply.
I will write u if i do need your support further.

Thanks once again

Regards

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