MR.X has a turnover of Rs 18000000 and he shows income on presumptive basis.His profit is 20% on gross sales.But he shows 8% profit on turnover.Now can 12% be deemed to be his concealed profit by the Income tax Department later on ?
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Replies (5)
As per my view.,
No more questions from ITD if showing 8 percentage of Profit...
No more questions from ITD if showing 8 percentage of Profit...
Yes, obviously it's concealed income.
How can you adjust this excess 12% profit in books with declaring Income.
NO, Problem because your turnover is less than 2cr. Govt is giving option to you that you do your tax audit or not, if you not give under presumption basis than audit is compulsory and maintain the books of acccounts also... basically govt is giving this rebate for less burdon on small taxpayers... so you can declare 8%
The profit as per books can be transfered to the proprietor/partner's account as such (that is 20%) no issues in that. The problem will come only if the assesee spends more than what was declared as income.
For example, actual profit @ 20% is Rs.20 lakhs. But income declared @ 8% so the profit taxed is Rs.8 lakhs oly. Now if the assesee purchases a property for any value above Rs.8 lakhs, say Rs.15 lakhs (from this source of Rs.20 lakhs) then the amount so excess spent that is Rs.7 lakhs shall be considered undisclosed/concealed income and subject to tax. If the assessee uses only Rs.8 lakhs from this business source and has any other valid source for the balance Rs.7 lakhs then no issues.
| Originally posted by : Jeeva Thangavelu | ||
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The profit as per books can be transfered to the proprietor/partner's account as such (that is 20%) no issues in that. The problem will come only if the assesee spends more than what was declared as income. For example, actual profit @ 20% is Rs.20 lakhs. But income declared @ 8% so the profit taxed is Rs.8 lakhs oly. Now if the assesee purchases a property for any value above Rs.8 lakhs, say Rs.15 lakhs (from this source of Rs.20 lakhs) then the amount so excess spent that is Rs.7 lakhs shall be considered undisclosed/concealed income and subject to tax. If the assessee uses only Rs.8 lakhs from this business source and has any other valid source for the balance Rs.7 lakhs then no issues. |
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NO, here the presumption is made on some " Deemed " percentage .. so once under this special presumptive scheme the assesse has legal right to declare a minimum of 8% of the turnover ... any excess profit/actual profit above this declared profit " SHOULD" be justifiable to have accured out of the said declared turnover ....
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