Covid19 Alert : Keep Social distance and utilize your time by joining CA CS CMA online classes at 30% disc Coupon: SAFE30 Call : 1800-3000-0505

44ad and its 5th provision


RAMESH D MODI (Proprietor)     05 June 2017

RAMESH D MODI
Proprietor 
 275 likes  4850 points

| My Other Post

In case of a partnership, net profit for the f.y. 2016-17 is ZERO after allowing interest and remuneration to partners as per section 40 b.

1) Gross receipt 30 lac
2) expenses including purchase.
26 lac
3) interest and remuneration 4 lac
4) net profit 00
Is the firm required to get his books audited u/s 44ab as he is not having any income which is chargable to tax.
Section 44ad(5)

avater

Manish (CA)     05 June 2017

Manish
CA 
 214 likes  3537 points

View Profile | My Other Post


(Guest)

In the second calculation, if the amount after deduction of Remuneration and Interest is a loss, will the audit be necessary?

 

 

avater

Manish (CA)     05 June 2017

Manish
CA 
 214 likes  3537 points

View Profile | My Other Post

Originally posted by : Madhavi Pandit
In the second calculation, if the amount after deduction of Remuneration and Interest is a loss, will the audit be necessary?

 

 

No.

Because, the income should be more than the maximum amount not chargeable to tax, which would be zero for the firm.

 

What is your opinion about it ma'am?


(Guest)

IF we don't use ITR 4(sugam) I believe,we can claim remunertion and interest on capital resulting in loss and audit won't be necessary (since we are not opting for 44AD). I have to see if the ITR utility accepts this and hope that the return is not rendered defective later.

If this is not allowed,it would be highly unfair to those partnerswho don't have any incomeother than interest on capital & remuneration. The whole of book profit will be taxed @ 30% in firm's hands where actually the firm has paid salary to partners.

Converting it into proprietorship will be beneficial then.

More views are welcome.

 


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  



Popular Discussion


view more »