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Books of account

Tax planning 524 views 2 replies

Satvir Singh

Newly minted CA

1733 Points Joined July 2009

A person has income from sole proprietor business (milk dairy), in the range of 3 lac to 3.5 lakh. The business has turnover of less than 30 lakh and doesnot maintain books of accounts. Is the firm liable to maintain proper accounts? I have also heard about a provision that if a firm has turnover under 40 lakh, profit can simply be taken as 5% of turnover. Please explain??

Replies (2)

Guest

That ques u hv askd consists of 2 concepts..1)sec 44AA,2)44AF..

As per sec 44AA & ur ques-1st thing is that Mr. X is carrying a non-specified proffesion & his income is >1.2 lakh,also turnover is >10lakh.So,there is requirement of compulsory maintenance of books of accounts.

Again as per sec 44AF-Profit as 5% of profit ll b taken only if the assessee is engaged in "retail trade" & the turnover is <40 lakhs..