44ad clarification.

1924 views 7 replies

 

I have follwing questions:

1. one of my client is retailer or wholeseller and his turnover is say 50 lacs for fy 11-12, can i use ITR-4S to file his return and showing profit more than 8%.

can department argue that assessee has not maintained books of accounts.

2. Income from Beauty parlour/tution/coaching classes/ dairy/estate agents/contractors/Insurance agents etc. fall in the definition of business and avail benefit of sectin 44AD ?

3. can persons other than  individual and HUF (company/firms etc) avail benefit of section 44AD ?

Replies (7)

yes available to both retailer n wholeseller

44ad applies to indl, huf n firm (other then llp) and no others

Yes you can take the 8 % profit on the income from the business only, & not to professional income. No books of accounts are required to be kept. Assessing Officer cannot ask for books of accounts. It is applicable for Indl, HUF & firm only.

INCOME FROM BEAUTY PARLOUR, TUITION INCOME ETC THESE ARE TREATED AS PROFESSION IN ORDINARY LANGUAGE.

BUT INCOME TAX GIVES THE LIST OF ONLY SPECIFIED PROFESSIONS ONLY.

THEREFORE WE CAN FILE ITR 4S ASSUMING IT BUSINESS.

BUT IT IS BETTER TO FILE ITR 4 AND PREPARE THE BALANCE SHEET IN THESE RETURNS.

THANKS.

1) As the turnover is less than 60 lakhs,  Profits can be presumed to be 8% or more.

2)Yes, all such business in your 2nd question are included in the definition of business u/s 40AD.

3)Individual , HUF , Firm - (except LLP) who is engaged in ANY BUSINESS - SEC 44AD is applicable..

Please Clarify  Some Issues related to Section 44AD:-

1.if a person is covered under sec.44 ad and also having income from house property along with a loss from second house prop. as self occupied then which ITR form to be Filled by him?

2.while Preparing cash Account in this case whether Drawings ,Direct and Indirect Exp. need to be Deducted or not?

 

Please refer.......

Regards

 

44AD

Presumptive scheme is not applicable to (i) a person carrying on profession as referred to in sub-section (1) of section 44AA; (ii) persons earning income in the nature of commission or brokerage income; or (iii) a person carrying on any agency business

Retrospective effect from 1st April 2011

 

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