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CA SONIYA AGARWAL (self practice) (3005 Points)

08 June 2013

WILL WORKS CONTRACT BE COVERED U/S 44 AD . MY CLIENT PROVIDES GENERATOR SERVICE TO BANKS , INSTITUTIONS , OFFICES , ON OCCASSIONS LIKE MARRIAGES AND PARTIES ETC .THEIR TDS IS DEDUCTED U/S 194C.

44AD EXCLUDES , PROFESSION U/S 44AA(1) , I SUGGESTED MY CLIENT TO COVER THEIR FIRM U/S 44 AD AND PAY TAX ON 8% OF PROFIT , IS IT CORRECT . THEIR TURNOVER IS LESS THAN 1 CRORE. PLZ REPLY URGENTLY

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2 Replies

Kulwant Singh Khalsa (CA STUDENT) (105 Points)
Replied 09 June 2013

yes you are correct as per section 44AD

For the purposes of this section,—

(a) "eligible assessee" means,—

(i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and

(ii) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading "C. - Deductions in respect of certain incomes" in the relevant assessment year;

(b) "eligible business" means,—

(i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and

(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of one crore rupees.

44AD(6) shall not apply to—

(i) a person carrying on profession as referred to in sub-section (1) of section 44AA;

(ii) a person earning income in the nature of commission or brokerage; or

(iii) a person carrying on any agency business.

Shashank Gokhale (no) (36 Points)
Replied 01 August 2013

My question is that a cab driver is earning income under S194C, he also has income from Insurance commission which is his minor income. Now can he avail the benefits of S 44AD? Please advice.

Shashank