I had started an Individual Proprietorship Business last year Fy20-21 and have profits/income less than 8% of gross sales (services).
Since ,I have invested a considerable amount of capital in purchasing equipment for the business ,I would like to claim Depreciation on it and also other deduction associated with the business.
Hence ,I have not opted for Presumption Taxation & NO Account Case but am disclosing my Books of Account u/s 44AA.
However,after complete verification of the online ITR3 return ,I am provided a Defective Return Prompt(refer above images) -
------- "You claimed income less than 8% of the Gross Turnover and Audit information is not filled." ----------
Why is there a requirement for minimum 8% income disclosure while filing u/s 44AA (and also an audit requirement for sales under 1 crore)?
More importantly how to file the return in cases where income is less than 8% gross turnover and still have the benefit of claiming deduction on depreciation of assets and other deductions?