Section 44ad

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 i have an query on section 44AD:-

Let if a person (individual assesse) is carrying on trading business in shoes and in financials of that business, he also showed the COMMISSION INCOME , now after including the commission income, whether that trading business will also go out of section 44AD.whether, he can now show the profit less than 8% overall.

Regards

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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16 September 2014 if commision is also earned then sec 44ad cannot be used as its agency business and hence ITR 4 should be filed

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 sir,

Now whether trading business also go out of scope of sec-44AD after including commission or only commission business will out.

SIR, I mean to say that is now assesse earning income from commission and from trading business.Now after including commission income in his financials, he can show less than 8% profit for trading business, as section says about ELIGIBLE BUSINESS.

Let,

Purchase 800000 sales 1000000
G.P 200000
1000000 1000000
Other exp. 160000 G.P 200000
Profit 40000
200000 200000

Now, my profit is less than 8% in trading business. that's why, i included in it, commission income, as indirect income as under:-

Profit 40000
+Commission 45000
85000

Now i want to say, ki i have to show minimum profit 8% of turnover i.e 1000000*8%=80000 from trading business separate from commission income or irrespective of commission income.

am i correct...??
because i read elsewhre that ki Eligible assesse engaged in eligible business.
Now its trading business is eligible business and commission is not.

Regards,

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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16 September 2014 hence when u have 2 income out of which 1 is non eligible then u need to file itr4 only as sec 44ad wont be permitted and u cannot use 44ad for 1 source of income n file itr 4s and for other itr4

as for both oly 1 itr is applicable itr4

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 means under ITR-4, i have to show only trding business under Section 44AD income.

as in PGBP head under ITR, it is as under:-

Net Profit as per profit & loss account:-xx
Less:-Profit included in above, related to business under section 44AD:- YY
Balance Income xx-yy

Now, xx-yy is commssion income.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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16 September 2014 both are 2 diff busines income n u need to show them under profits and gains from business or profession

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 September 2014 you will show both the incomes in P&L in ITR4 as tushar suggested. However, in BP sheet, you will provide details of part of profit which is to be taxed under 44AD at 8% profit rate.

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 Agree sir, i got that. Thanks.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 September 2014 you r welcome friend..

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