44AD Income

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Proprietor
538 Points Posted on 04 July 2020
Turnover ₹ 100 Lakhs
Book Profit ₹ 4 Lakhs

Whether he has to audit his accounts or can show his income u/s 44ad i.e. 8% of Turnover (₹ 8,00,000/-)
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On 04 July 2020 at 19:11 Report
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Quick Summary
This discussion clarifies the implications of Section 44AD for a business with a turnover of ₹100 Lakhs and a book profit of ₹4 Lakhs. It confirms that the business can opt for Section 44AD and declare income at 8% of turnover (₹8 Lakhs), or 6% for electronic transactions. Declaring a higher income than book profit is permissible and does not necessitate an audit under Section 44AB. However, opting out of 44AD means the business cannot use it for the next five years.

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Student
232 Points Posted on 04 July 2020
If he is showing an income of 4 lakh then he has to maintain his books of account and get it audited for that AY. Moreover, he can't opt 44AD for the next 5 year and has tp follow 44AB if his income exceeds the taxable limit.
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On 04 July 2020 at 19:40
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Proprietor
538 Points Posted on 04 July 2020
Whether he can show income u/s 44AD i.e. ₹ 8,00,000/- ( 8% of 1,00,00,000/-)
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On 04 July 2020 at 20:06
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Student
232 Points Posted on 04 July 2020
Yes he can.
And for the transactions through electronic mode he can choose 6% instead of 8%. So you may calculate accordingly.
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On 04 July 2020 at 20:11
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Proprietor
538 Points Posted on 04 July 2020
It will not create any problem since his book profit is ₹ 4 Lac
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On 04 July 2020 at 20:15
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Student
232 Points Posted on 04 July 2020
Nope. You're showing more income than actual. So IT authority has no problem with that. Plus the turnover limits are with in 44AD, so no problem for opting 44AD
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On 04 July 2020 at 20:17
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Proprietor
538 Points Posted on 04 July 2020
Ok Thank you
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On 04 July 2020 at 20:23

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