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44AD Electronic Mode

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Ashish Kumar

25 Points Posted on 23 December 2020

If a customer directly deposits cash to my bank account, will it come under category of electronic mode at which income is considered at 6% instead of 8%?

Replies (5)

Quick Summary

This discussion clarifies whether direct cash deposits into your bank account are considered an 'electronic mode' for presumptive income tax under Section 44AD. Generally, direct cash deposits are treated as cash receipts, meaning a minimum profit of 8% of turnover must be declared. Electronic modes like account payee cheques or ECS transfers qualify for the lower 6% profit rate. Therefore, a direct cash deposit by a customer will likely fall under the 8% rule, not the 6% electronic mode provision.

ayusmita

Tax consultant

3466 Points Posted on 23 December 2020

If money received by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account then such income consider at 6%

Krishna Chaudhary

Accountant

1331 Points Posted on 24 December 2020

Under presumptive Income tax tax under section 44ad if income is received in non cash mode minimum turnover of 6% is required to show.
of cash receipt minimum 8% of turnover is required to show as profit.

so if customer directly deposited amount in to your account. 6% of the amount deposited must be shown as profit of your business.