I have a query based on 44AD Provisions. 44AD states an assessee to declare a minimum profits of 8%. Let us assume the assesse declares his income in such way but does not incurr expenses upto the remaining 92%. That remaining portion of the amount will remain idle in bank account. How to proceed with this case? Is it legal to do so , as the assesse is not violating any provisions of the Act and complies with the declaration of the income at 8%.
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44ad query
Replies (1)
It is a deemed profit declaration, nothing to do with actual bank balance.
There might be much more expenses incurred in relation to carrying on the business. But such deductions are not allowable for computation of tax on declared profit. So the actual figures definately will not match !
There might be much more expenses incurred in relation to carrying on the business. But such deductions are not allowable for computation of tax on declared profit. So the actual figures definately will not match !
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