44AD details required

why 44 ad not have balance sheet
Replies (2)
Quick Summary
Section 44AD of the Income Tax Act allows small businesses with turnover under £2 crore to use presumptive taxation, meaning income is calculated as a percentage of turnover rather than actual profit. This simplifies tax filing and removes the mandatory requirement for a balance sheet. However, certain financial details like debtors, creditors, cash, and bank balances are still needed for the ITR form.

Generally , as per the income tax act the taxable business income is computed as follows.

Turnover or Gross receipts from Business -
Less - Expenses related to earn business income. -
Taxable Business Income -

So for this taxpayer has to maintain books of accounts and prepare Profit and loss account, Balance sheet Etc.

However as per the provisions of the section 44AD of the Income tax act, which is for small taxpayer (Turnover less than 2 crore ) , Income is computed on presumptive basis @ 8%,6% of the turnover or Gross receipts as the Case may be , So maintenance of books of accounts are not necessary as per the income tax act , and therefore  section 44AD do not have Balance sheet . however certain information like Sundry Debtors, Sundry creditor, Cash , Bank , Stock etc. are mandatory information in ITR4 ( section 44AD,) so it is better to maintain P&L and Balance sheet .

Only financial particulars required for 44AD and balance sheet need not match .

So you can fill only mandatory fields

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