Section 44ad of the income tax act, 1961.

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Eleiya Onali Kagdi (Querist)

26 December 2013 Net Profit as per Profit & Loss a/c. is more than 8% of Turnover, therefore deemed income u/s. 44ad will be equal to net profit. Can I claim deduction in respect of depreciation as per books and as per income tax and 1/4th of personal expenses

CA Pallav Singhania

CA Pallav Singhania (Expert)

26 December 2013 CERTAIN OTHER POINTS OF CONSIDERATION

An assessee opting for the above scheme shall be exempted from maintenance of books of account related to such business as required under section 44AA.

The assessee can voluntarily declare a higher income in his return

An assessee opting for the above scheme shall be exempted from payment of advance tax related to such business.

In the case of assessee being firm, the normal deduction in respect of salary and interest paid to the partners shall be allowed as deduction out of such presumptive income subject to conditions and limits specified in clause (b) of section 40.

In case assessee claims that he has earned income lower than specified percentage and such income is more than maximum amount not chargeable to tax, Ss. 44AD(5) and 44AA(2)(iv), mandates him to maintain books of accounts and other documents as specified u/s 44AA, get them audited from the accountant and furnish report as required u/s 44AB.

for complete details

https://www.caclubindia.com/articles/presumptive-taxation-u-s-44ad-simplified-18779.asp#.Urw_T87W3Dc

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

03 October 2021 The WDV of assets will be reduced to as per depreciation claim. But the same is not allowed for deduction from deemed income. No personal expenses are allowed to be deducted.

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