Tds-u/s 194d and 44 ad

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CA ANANT KUMAR (Querist)

06 January 2012 An assessee has earned insurance commission income.TDS has been deducted u/s 194D.Can he opt to file ITR-4S by showing 8% of his gross receipts u/s 44AD as his G.T.I?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

06 January 2012 HE CAN OPT FOR SECTION 44AD. SHOW INCOME AT SUCH HIGHER LEVEL THAT JUSTIFIES THE BANK ENTRIES AND OTHER BALANCE SHEET ITEMS , PARTICULARLY INVESTMENT IN ASSETS.
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IN CASE INCOME DECLARED IS TOO LOW AND INVESTMENTS MADE ARE AT HIGHER SIDE, THE ASSESSEE WILL FACE PROBLEMS.
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IN SUCH CASES, SHOW AT LEAST 60% OR MORE OF THE COMMISSION INCOME AS TAXABLE INCOME.
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Prakash Kochar

Prakash Kochar (Expert)

08 January 2012 u/s. 44AD professional income is not included, is not eligible business. Profession is defined u/s. 2(13)– which says that profession includes Vocation. Insurance agent is appointed after examination,needs a special skill. 8% profit of GTI may not be allowed.
In addition Circular No. 594, dt. 27-02-1991/15-05-91 is not deleted, which says that if gross commission is less than 60,000/- the benefit of adhoc deduction at specified rate will be allowed. The same may be considered, though the opening words of sect. 44AD says that, Notwithstanding anything to the contrary contained in sections 28 to 43C........

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