u/s 44ad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2011 sir if my net profit as per p&l a/c 4.3% then can i liable todo audit as per a.y.11-12 provision.i am wholesaler then my net profit is never above8%.if i accept u/s44ad then i show 8% net profit of sales.but my books show 4.3% net profit.what i do?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

22 July 2011 Profit can easily be increased or decreased-
in the books of account provided the person maintaining the books of account is a good "accountant".

.

If you are a man of principal, do not disturb your books of account.

Without disturbing your books, you can claim that your profit is 8% of turnover.
That will be shown in computation only.

By doing so , you may have to pay tax, but your capital will not increase to the full amount of taxed profits.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

22 July 2011 If turnover is less than Rs.60/- lacs, in the absence of 8% profit, tax audit under section 44AB should be sought for as per section 44AD(5) of the Income tax Act,1961.

CA Ashwani Agarwal

CA Ashwani Agarwal (Expert)
Follow

22 July 2011 If turnover is less than 8% then you have the following options:

1. As told by Mr. Paras Bafna, change your books to show at least 8% profit.

2. Keep your books as it is but For the purpose of income tax, compute profit as 8% of turnover, pay tax and stay tension free.

3. Get your books of accounts audited by a CA and file your return with actual profits.

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2011 thanks sir. its very imp knowledge for me sir.one more query is
1.if my net profit above 8% (turnover below 60lakh) then which ITR i file, ITR4 Or ITR4S for a.y.11-12.
2.if i mainten books then i file ITR4 without take u/s44ad.

CA Ashwani Agarwal

CA Ashwani Agarwal (Expert)
Follow

23 July 2011 If your NP is above 8% and turnover is below 60 lakhs then file ITR 4S.

Even if you keep books of accounts still you can fill ITR 4S.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now