Defective return

No... Commission income can't be presumptive taxation scheme u/s 44ad.

Normal provisions applicable and Tax Audit also applicable as Your turn over...

No way for escape.

Limit for tax audit is 1crore only.
But for presumptive basis alone limit is 2crores.

That means even if tax audit applicable , the tax payer has option to choose presumptive basis taxation if the turnover is upto 2cores.


But the tax payer of commission income is not eligible for presumptive scheme of taxation

Thanks..

but he purchases & sells airline tickets... he charges service charge on it . which is almost 5% of gross receipts. so in that case will his service charge be the gross receipts or total ticket sales value ?

44AD is not applicable for commission income.

Actual your gross receipts will be to the extent of your commission income. What you are considering as GROSS RECEIPTS ?

If you are acting as Travel agent and gets in return COMMISSION from Travel Operators then take commission receipts as your gross receipts and prepare accounts accordingly.

pl clarify above. Re-cast your accounts and file revised return if for AY 2019-2020. As you said commission income is low then if it's below 1 crore then no tax audit issue.

You can consider the Gross receipts as per Your Service charges...

But,
How about Your billing details...?!

Yes... I agreed to Mr Kapadia Pravin...

Service charge is 4.5 Lacs ... total receipt is 1.2 crore

How about Your billing details...?!

How to You give bills to passengers...?

Flight ticket 5000
service charge 500
gst @ 18% on 500 = 90
total = 5590

As flight ticket money goes to Airline Company, it's not your receipt for the purpose of 44AB.

Flight ticket billing is on behalf of Airline Company. it's not your revenue.

As per Guidance Note on Tax Audit under Section 44AB of the Income-tax Act, 1961,

Refer Para 5.17 - The following items would not form part of "gross receipts in business" for purposes of section 44AB:-

(viii) - In the case of a travelling agent, the amount received from the clients for payment to the airlines, railways etc. where such amounts are received by way of reimbursement of expenses incurred on behalf of the client. If, however, the travel agent is conducting a package tour and charges a consolidated sum for transportation, boarding and lodging and other facilities, then the amount received from the members of group tour should form part of gross receipts.