Just to avoid any confusion please consider below example. Bank balance is 1,76,000 and profit after tax is 56,000.
The question is
1) how much money t can be distributed to partners as profit 56,000 or 1,76,000.
2) If only 56,000 can be distributed what is the way to give the 1,20,000 back to partners.
| Bank Statement | |||
| DR | CR | Balance | |
| Opening Balance | 0 | ||
| Gross Receipts | 1,000,000 | 1,000,000 | |
| Misc. Business Expenses | 800,000 | 200,000 | |
| Income Tax | 24,000 | 176,000 | |
| Closing Balance | 176,000 | ||
| Calculation of Tax U/s 44AD | |||
| Gross Receipts | 1,000,000 | ||
| Deemed profit u/s44AD @ 8% | 80,000 | ||
| Tax @ 30% | 24,000 | ||
| Profit after Tax | 56,000 | ||
| Difference between profit and bank balance | 120,000 | ||
You can distribute Rs. 1,76,000/-
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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CAclubindia
