Section 44 ab

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MANJUNATHA (Querist)

17 March 2014 if the turnover is below 1cr the income declared should be higherthan 8%.

As per the regular books of accounts maintained:
(as per the profit and loss account)
my total turnover is Rs.75.00 lakhs
Expenses before dep dr to P&L Rs.(68.05) Lakhs
Depn on computers debited @ 10% (Rs.0.80) Lakhs
(book value 8.00 lakhs)
Net profit as per P& L Rs.6.15 Lakhs
(after all the expenses and dep debited to P&L)

Question:
In statement of Income computation sheet
Net Profit Rs.6.15 Lakhs
Add: Dep @ 10% dr Rs.0.80 Lakhs
--------
Rs.6.95 Lakhs
Less : Dep allowed 60%Rs.4.80 Lakhs
--------
N/P chargeable to tax Rs.2.15 Lakhs

whether the section 44AB is applicable because the ultimate N/p rs.2.15 Lakhs falls below 8%.
or
44AB does not apply because the n/p as per P&L Rs.6.15 Lakhs is 8.20%

can i submit the above return without 44AB.

Nikhil Kaushik

Nikhil Kaushik (Expert)

17 March 2014 if you want to claim profit at 2.15 lakhs, then you need to get the audit done under 44AB.

under 44AD the profit is computed assuming that depreciation has been provided already. 6.15 lakhs you are computing is before depreciation. thats the mistake.

Please read 44AD(2).

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

17 March 2014 Agreed with expert.

OM SAI SRI SAI JAI JAI SAI

MANJUNATHA

MANJUNATHA (Querist)

18 March 2014 my question is not about section 44AD.
if i file the return as the books of accounts are maintained, what amount is considered by income tax for calculating the % of profit on total turnover (1)Rs.6.15 lakhs as per Profit and Loss account or (2)Rs.2.15 lakhs calculated after adjustment of dep as per the computation sheet.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

18 March 2014 The profit calculated after adjustment of depreciation shall consider for the purpose of 8% on turnover.

So in your case Rs.2.15 lakhs required to have 8% or more on the gross turnover Otherwise liable for tax audit since your total income exceeds basic exemption limit.

OM SAI SRI SAI JAI JAI SAI

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