Section 44AD

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 June 2011 According to ammendment in section 44AD it includes "any business".

whether any business includes insurance agency / Mutual fund agent ?

For the purpose of Audit under section 44AB insurance commission shall be 60 lakhs or more. ie. applicable for business.

But circular nos. 594, 648, 677 are also applicable. which talks about taxation of insurance commission in case books of accounts not maintained and gross commission is less then 60000.

Now, If the gross commission is more than 60000 whether it will be covered by section 44 AD or not ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 June 2011 Section 44AD is applicable in all such cases which are not profession and turnover limit
is below 60.00 lac.

Prescribed Tax Audit Limit for LIC Agents is
Rs 60.00 lacs as it is termed as business and does not fall in the definitions of profession prescribed by ICAI as well as under the Income Tax Act itself.

You can show profit at desired level which ranges between 8% to 100%. What else the department can do? In case of small assessees it has left every thing upon the assessee.

Querist : Anonymous

Querist : Anonymous (Querist)

11 June 2011 Thanks for you reply,

I have read in a Taxation newspaper- "Circular nos. 594, 648, 677 separately talks about presumptive taxation of insurance and mutual fund commission, so section 44AD doesn't applicable on insurance and mutual fund commission."

Now what will be your answer ?

Please Reply

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 June 2011 The circulars are limited to Gross insurance commission of up to Rs 60,000. For commission over and above 60,000, circulars are not applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2011 thank you sir

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