Section 44ad of income tax
This query is : Resolved
28 February 2014
In case Partnership firm having Turnover of Less than 1 Crores and claiming loss, is it necessary to conduct Tax Audit u/s 44AB, as the income offered is less than 8 % of Gross Receipt.
“Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.”
Is Tax audit u/s 44AD r.w.s 44AB Applicable in this case ??
“Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.”
Is Tax audit u/s 44AD r.w.s 44AB Applicable in this case ??
28 February 2014
it has no application for firms as the whole of the income of the firm is taxable unlike individuals where no tax is applicable upto 2 lakhs (for less than 60 years old)
Therefore, for firms tax audit shall be compulsory in such cases)
Therefore, for firms tax audit shall be compulsory in such cases)
04 March 2014
In case if Net profit Exceeds 8%, then also is assesses eligible to opts for showing net profit of 8% and not higher??
04 March 2014
under 44AD, you have the option of claiming 8%. you need not maintain any records of the expenses. 8% of the turnover shall be assumed to be your profit.
06 March 2014
how will the remuneration be calculated for partners? in case there are no books maintained and we are showing 8% of Gross receipt as deemed income.
06 March 2014
what is the problem in computing remuneration???
06 March 2014
what will be the book profit? new doubt
06 March 2014
as no books will be maintained in case applying Sec 44AD ? how will the remuneration be calculated
06 March 2014
it is simple. the deemed profit shall replace the book profit. Now I know most of the articles on 44AD have not touched on this issue and the act doesnt through any clear light on this. But it is natural that deemed profit is considered as book profit in 44AD cases.
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06 March 2014
thank you. so 8 % will be deemed profit for calculation of remuneration of partners
06 March 2014
you are welcome Kiran....
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