Taxability u/s 44ad or not?
This query is : Resolved
31 July 2012
dear all,
i started business in jan,12 and upto 31st mar,2012 i m having income of Rs.5,00,000/-from renting crane on hire.
so m i covered u/s 44AD i.e presumptive taxation @ 8% of gross receipts
OR i can continue it with normal provisions of I.T Act,1961 and showing more income..
i m confused. so plz help me.
urgent
i started business in jan,12 and upto 31st mar,2012 i m having income of Rs.5,00,000/-from renting crane on hire.
so m i covered u/s 44AD i.e presumptive taxation @ 8% of gross receipts
OR i can continue it with normal provisions of I.T Act,1961 and showing more income..
i m confused. so plz help me.
urgent
31 July 2012
Yes you are covered u/s 44AD.
Even u/s 44AD you can show income higher than 8%.
Even u/s 44AD you can show income higher than 8%.
31 July 2012
Income higher than 8% can be shown even if you are covered by 44AD. But if you are not going with 44AD then you have to get your accounts audited.
01 August 2012
you have both the option 44AD and normal. you can take the benefit of 44AD and show the income more than 8 %.
8% limit is minimum. you can show your income at a higher rate.
audit is compulsory only when if you want to show the net profit below 8 % .
8% limit is minimum. you can show your income at a higher rate.
audit is compulsory only when if you want to show the net profit below 8 % .
01 August 2012
thanx to all experts,
1)Now can anyone plz tell me which ITR is to be filled ( ITR-4 or 4S)?
2)And how to show business income u/s 44AD in the respective ITR?
1)Now can anyone plz tell me which ITR is to be filled ( ITR-4 or 4S)?
2)And how to show business income u/s 44AD in the respective ITR?
02 August 2012
for 44AD file itr4S. Show the gross receipts as prompted in 4s
06 August 2012
thanx mr amol but can u plz elaborate it?
26 July 2025
Sure! Here's a detailed explanation for your query on **taxability under Section 44AD** and filing the correct ITR:
---
### 1. **Applicability of Section 44AD**
* **Section 44AD** applies to small businesses with **turnover/gross receipts up to Rs. 2 crore**.
* It allows **presumptive taxation**, where you declare **8% of your gross receipts as income** (6% if payments are received digitally).
* You **don't need to maintain detailed books of account** or get your accounts audited if you opt for 44AD and declare income as per the prescribed percentage.
---
### 2. **Your Situation**
* You started business in January 2012 and earned Rs. 5,00,000 from crane hiring by 31st March 2012.
* Since your gross receipts are below Rs. 2 crore, you are **eligible to opt for Section 44AD**.
* You can declare **8% of Rs. 5,00,000 = Rs. 40,000** as your taxable income under presumptive taxation.
* Alternatively, you can declare **more than 8%** if you want to show higher income.
* If you declare **less than 8%**, you **must maintain books of account and get them audited**.
---
### 3. **Option to Continue with Normal Provisions**
* You can also choose **not to opt for 44AD** and file under normal provisions.
* But then you need to maintain books of account and may require audit depending on your turnover and income.
* For a small turnover like Rs. 5 lakh, presumptive taxation under 44AD is simpler and less cumbersome.
---
### 4. **Which ITR to File?**
* For businesses covered under **Section 44AD**, the recommended ITR is **ITR-4S (Sugam)**.
* ITR-4S is specifically designed for presumptive taxation cases under Sections 44AD, 44AE, and 44ADA.
* If you opt to file under normal provisions (maintaining books), you will need to file **ITR-4 (not Sugam)**.
---
### 5. **How to Show Income u/s 44AD in ITR-4S?**
* In ITR-4S, you will report:
* **Gross receipts** (Rs. 5,00,000 in your case)
* The system will calculate **8% presumptive income** automatically (or you can enter your declared income if higher)
* You need to declare the **nature of business** and other basic details.
* Since presumptive income is declared, you do **not have to submit audit reports**.
---
### 6. **Summary**
| Question | Answer |
| -------------------------------- | ----------------------------------------------------- |
| Am I covered under Section 44AD? | Yes, since turnover < Rs. 2 crore |
| Minimum income to declare? | 8% of gross receipts (can declare higher if you want) |
| Need to maintain books? | No, if you declare minimum 8% income |
| Need audit? | No, if minimum 8% declared; yes if lower declared |
| Which ITR to file? | ITR-4S (Sugam) if 44AD opted; else ITR-4 if normal |
---
If you want, I can help you fill out a sample ITR-4S with your data — just let me know!
---
### 1. **Applicability of Section 44AD**
* **Section 44AD** applies to small businesses with **turnover/gross receipts up to Rs. 2 crore**.
* It allows **presumptive taxation**, where you declare **8% of your gross receipts as income** (6% if payments are received digitally).
* You **don't need to maintain detailed books of account** or get your accounts audited if you opt for 44AD and declare income as per the prescribed percentage.
---
### 2. **Your Situation**
* You started business in January 2012 and earned Rs. 5,00,000 from crane hiring by 31st March 2012.
* Since your gross receipts are below Rs. 2 crore, you are **eligible to opt for Section 44AD**.
* You can declare **8% of Rs. 5,00,000 = Rs. 40,000** as your taxable income under presumptive taxation.
* Alternatively, you can declare **more than 8%** if you want to show higher income.
* If you declare **less than 8%**, you **must maintain books of account and get them audited**.
---
### 3. **Option to Continue with Normal Provisions**
* You can also choose **not to opt for 44AD** and file under normal provisions.
* But then you need to maintain books of account and may require audit depending on your turnover and income.
* For a small turnover like Rs. 5 lakh, presumptive taxation under 44AD is simpler and less cumbersome.
---
### 4. **Which ITR to File?**
* For businesses covered under **Section 44AD**, the recommended ITR is **ITR-4S (Sugam)**.
* ITR-4S is specifically designed for presumptive taxation cases under Sections 44AD, 44AE, and 44ADA.
* If you opt to file under normal provisions (maintaining books), you will need to file **ITR-4 (not Sugam)**.
---
### 5. **How to Show Income u/s 44AD in ITR-4S?**
* In ITR-4S, you will report:
* **Gross receipts** (Rs. 5,00,000 in your case)
* The system will calculate **8% presumptive income** automatically (or you can enter your declared income if higher)
* You need to declare the **nature of business** and other basic details.
* Since presumptive income is declared, you do **not have to submit audit reports**.
---
### 6. **Summary**
| Question | Answer |
| -------------------------------- | ----------------------------------------------------- |
| Am I covered under Section 44AD? | Yes, since turnover < Rs. 2 crore |
| Minimum income to declare? | 8% of gross receipts (can declare higher if you want) |
| Need to maintain books? | No, if you declare minimum 8% income |
| Need audit? | No, if minimum 8% declared; yes if lower declared |
| Which ITR to file? | ITR-4S (Sugam) if 44AD opted; else ITR-4 if normal |
---
If you want, I can help you fill out a sample ITR-4S with your data — just let me know!
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