Applicability of sec.44ad

Yes its applicable..............

A company can also avail d benefit of sec 44AD............and if you want 2 show profit less than 8% then audti of d a/cs is compulsary.

Yes, Section 44AD is applicable in AY2011-12 for private company if ,

your Annual Turnover does not exceed 60 Lakhs in FY2010-2011 & you don't want to show the actual profit.

Then in this case you are compulsory to show atleast 8% profit u/s 44AD

& from this profit you cannot claim any deduction except salary to partners & interest on capital (condition apply).

44AD. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”.

Explanation.—For the purposes of this section,—

          (a)  “eligible assessee” means,—

       (i)  an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009) ^27a ; and

      (ii)  who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading “C. - Deductions in respect of certain incomes” in the relevant assessment year;

According to the above definition  of eligible assessee a pvt. ltd. company is not covered u/s 44 AD, hence the benefit of the same will not be available to them. This benefit is even restricted to Limited Liability Partnership.

The provisions of sec 44 AD is not applicable on corporate assessee .

Originally posted by : Mansha
	The provisions of sec 44 AD is not applicable on corporate assessee .

It is not applicable even on LLPs.

the provisionof sec44AD are not applicable on "prv ltd co." because eligible assessee-ind,huf or prtnership firm(not being ltd liab.firm)

As per section 44AD it is not applicable in case of corporate as well as LLP assessee. In my view if turnover is less than 60 lacs and profit is also less than 8% pvt ltd company can file their ITR without tax audit.

However there is an option in ITR 6 utility, provided by income tax department, to show profit u/s 44AD !!!!!

Originally posted by : CA Saiyum khan
	44AD. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”.   Explanation.—For the purposes of this section,—           (a)  “eligible assessee” means,—        (i)  an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009) 27a ; and       (ii)  who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading “C. - Deductions in respect of certain incomes” in the relevant assessment year;   According to the above definition  of eligible assessee a pvt. ltd. company is not covered u/s 44 AD, hence the benefit of the same will not be available to them. This benefit is even restricted to Limited Liability Partnership.

agreed with CA saiyum khan

Dear Ashish,

I agree with CA Satish, with regard to applicability of tax audit even when the profit shown is less than 8% of turnover. As sec. 44AD is not applicable to Pvt Ltd. Companies, the applicability of provisions of having tax audit done if profit shown is less than 8% does not arise. Hence, normal provisions of IT Act will apply and as per normal provisions, if turnover is less than Rs. 60 Lakhs p.a. no tax audit is required to be conducted even when the profit is less than 8% of turnover.

Agree with CA SAIYUM KHAN

yes it is not applicable on Company

not applicable to pvt ltd co.

and can show less than 8% profit.

no tax audit required.

since stat audit alwz there

Pvt limited company / LLP / corporates are covered under audit mandatory basis, so how they can avail 44AD?