44AD presumptive taxation

If a partnership firm took presumptive taxation scheme and if it is having loss... in the business...
then in under 44AD how we can show profit??(for gross sales)
can we show the profit percentage exactly at 8 percent...or if we show at higher how we can adjust this profit in our books......
at what percentage can we adjust???
Replies (3)
Quick Summary
This discussion clarifies how presumptive taxation under Section 44AD operates, even when a partnership firm experiences business losses. It explains that tax is calculated on turnover at a prescribed percentage (8% or 6%), irrespective of actual profit or loss. While you can declare a profit lower than the presumptive rate, this requires a tax audit. Statutory books will reflect the tax expense based on the chosen presumptive income.

44AD Presumptive taxation is irrespective of actual profit/loss of Assessee. It is payable on Turnover/Gross Sales/Gross receipts at specified percentage i.e 8%/6% as the case may be.

If assessee wants to claim lower income than 8% presumptive income, he can claim so but subject to tax audit . (Read sec.44AD(4) + 44AB together)

In statutory books, you will just record 'Tax expense/(Deferred) if you opt presumptive income.
Agree with Mr. madan with one exception... the total income should be minimum 8% of total turnover or the actual profit whichever is higher
Thank you

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register