Business under 44ad

561 views 6 replies

SUNIL KUMAR

ARTICLE

109 Points Joined January 2016

sir, My friend doing a small business and filed ITR u/s 44AD of income tax. he is not maintained books of accounts. he has to be paid job work to a contractor of Rs. 1,20,000 during the F.Y. 2014-15. I want to ask can he paid job work in cash bifurcating total amount in small amount. job contractor is ready to accept cash. is there any issue in paying cash ? please reply.

Replies (6)

Ruchi

1410 Points Joined March 2015

Yes , he can pay cash to a job worker provided the cash paid doesn't exceed 20000 in one day.

CA Hardik Joshi

Credit Manager

480 Points Joined February 2016

Dear Friend,

For Filing ITR u/s 44AD, Assessee is required to maintain sales ledger, sundry debtors and sundry creditors ledger. depending upon the nature of business, simplify computation to arrive net profit.

Assessee can make transactions of receipts and payment in cash provided, payment to single person does not exceed 20000 a day.

Regards,

Hardik Joshi

Rohit Goyal

Financial and Taxation Consultant

206 Points Joined February 2016

To pay in cash he should comply the provisions of Section 40A(3) & Rule 6DD, else payment made will be disallowed, subject to certain exceptions.

As per the provisions of Section 40A(3) : Payment in cash is allowed upto Rs.20000 to a person in day. It means One Day - One Person - Max. Rs.20000 - in Cash.

Rule 6DD provides exceptions of it.

Friends, here I am sharing a link of Income Tax Calculator for AY 2016-17 (Incuding Presumptive Income of eligible Business u/s 44AD and many more. Kindly download it and after using give your feedbank also.

/share_files/income-tax-estimation-for-ay-2016-17-69441.asp

Thanks & Regards

Rohit Goyal

CA Prateek Garg

CA in Practice

1447 Points Joined November 2009

Since the assessee is paying tax u/s 44AD hence there is no question of disallowance u/s 40A(3).

He may pay the entire amount in cash in one day or in any way convenient to him. Because he is not asking for allowance of this amount hence there is no question of disallowance..

There is not problem in paying the entire amount in cash as long as he paying the tax u/s 44AD

Rohit Goyal

Financial and Taxation Consultant

206 Points Joined February 2016

Thanks, Mr. Prateek

I am sorry for my Previous Reply.

As, Section 44AD begins with the wordings “Notwithstanding anything to the contrary contained in sections 28 to 43C”.

This means that if there is anything which is contradicting the provisions of Section 44AD, then the provisions mentioned in the section 44AD will override those provisions and such provisions will not be applicable.

In short, provisions of section 44AD have overriding effect over sections 28 to 43C unless and until mentioned otherwise.

& also No need to Pay Advance Tax.

Thus, 40A(3) – Cash payment above Rs. 20,000/- will not be applicable in case of eligible assessee carrying on eligible business.

Sorry, Once again.

CA Prateek Garg

CA in Practice

1447 Points Joined November 2009

No problem sir... we all are learning... never mind

Originally posted by : Rohit Goyal
	Thanks, Mr. Prateek I am sorry for my Previous Reply. As, Section 44AD begins with the wordings “Notwithstanding anything to the contrary contained in sections 28 to 43C”. This means that if there is anything which is contradicting the provisions of Section 44AD, then the provisions mentioned in the section 44AD will override those provisions and such provisions will not be applicable. In short, provisions of section 44AD have overriding effect over sections 28 to 43C unless and until mentioned otherwise. & also No need to Pay Advance Tax. Thus, 40A(3) – Cash payment above Rs. 20,000/- will not be applicable in case of eligible assessee carrying on eligible business. Sorry, Once again.