Section 44ad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 March 2013 Dear Experts,

Sir one of our client is Proprietor in "A" & Partner in Firm "B".

T/o of Business "A" is Rs. 16 Lakh, Profit of Business "A" is Rs. 6 Lakh which includes Remuneration From Firm "B" Rs. 400000 & Profit from Firm "B" Rs. 1 Lakh, Other Interest Rs. 20000.

Now 8% of 16 Lakh is Rs. 1.28 lakh.

Net Profit after Deducting Other Income & Remuneration & Profit is Rs. 80000.

Now which profit is to be taken for Computation Rs. 128000 or Rs. 80000.

Thanking you in advance for Reply.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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21 March 2013 You have to consider Rs.1,28,000 u/s 44AD for the purpose of profit from proprietor firm "A".

If you want to offer Rs.80000 from proprietor firm "A" only then you should be make audit u/s44AB because of you offering lower income than minimum income prescribed u/s 44AD and your taxable income exceeds basic exemption limit so if you not want to offer Rs.1,28,000 or more then you should be make tax audit.

OM SAI SRI SAI JAI JAI SAI

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Querist : Anonymous

Querist : Anonymous (Querist)

21 March 2013 Thanks sir......

Jai Sai Ram..........

Sir i was thinking that We can consider Remu & Profit as business income for 8% also.

But now m clear.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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22 March 2013 In the case of Partnership firm then 8% profit shall be consider as Profit + Remunaration paid to the partners.

But your case is individual assessee who have a sole proprioter ship firm and also a partner in another firm so there is two different business to the individual so he have to offer minimum of 8% profit from his proprietorship firm(business) u/s 44AD.

And remunaration from partnership firm is separate business not related to proprietorship firm or any other business so remunaration from partnership firm not included to the proprietorship firm's profit while computation of 8% profit u/s 44AD.

OM SAI SRI SAI JAI JAI SAI

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