Partnership firm - presumptive taxation 44ad

The section 44AD itself starts with........... 44AD. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession" :

So, anything stated in section 40(b) not applicable to section 44AD.. Earlier the deduction was allowed from the deemed profit of 6/8% (vide sec, 44AD(2)) which has has been specifically removed by finance act, 2016.

The provision specified that the deductions u/s. 30 to 38 have deemed to have taken effect, but not 40(b), so if any deduction u/s. 40(b) taken by firm, it will be reversed !!!

So, the amount deducted by the partners can be tax-exempt capital, but not salary or interest!!! (when already 9% profit declared).

In the above example I am declaring 9.6% profit after debiting Remunereation and Interest. Is this allowed? 

No...

Please understand in 44AD no way for Remuneration and Interest to partners...

So,

If you will opt u/s 44AD then you must declare without Remuneration and interest...

But.,

Why not you opt u/s 44AA with 8% of profit...?

Without 44AB....??!!!

I have turnover of Rs. 1.5CR

Originally posted by : shashank hebbar
	I have turnover of Rs. 1.5CR

If opt u/s 44AD then you must show profit @ 8% = Rs. 12,00,000/-

*Once again I says, No way for claim Remuneration and Interest on Capital...

Also if You will file u/s 44AA (Without 44AB) then You can claim Partners remuneration, Interest on Capital and depreciation (If available)

Please go to this forum...

You can get some more clarity about the new activities u/s 44AD....

https://www.caclubindia.com/forum/44-ad-and-partnership-income-after-salary-and-interest-432606.asp

Thank you Sir.

Originally posted by : RAJA P M
	Originally posted by : shashank hebbar I have turnover of Rs. 1.5CR If opt u/s 44AD then you must show profit @ 8% = Rs. 12,00,000/-   *Once again I says, No way for claim Remuneration and Interest on Capital...   Also if You will file u/s 44AA (Without 44AB) then You can claim Partners remuneration, Interest on Capital and depreciation (If available)

The firm has turnover of 1.5CR. So, if ITR 5 is used tax audit will be necessary. The limit of 2Cr for tax audit is only for those assessees who are opting for ITR 3(44AD etc). 

Originally posted by : Madhavi Pandit
	Originally posted by : RAJA P M Originally posted by : shashank hebbar I have turnover of Rs. 1.5CR If opt u/s 44AD then you must show profit @ 8% = Rs. 12,00,000/-   *Once again I says, No way for claim Remuneration and Interest on Capital...   Also if You will file u/s 44AA (Without 44AB) then You can claim Partners remuneration, Interest on Capital and depreciation (If available) The firm has turnover of 1.5CR. So, if ITR 5 is used tax audit will be necessary. The limit of 2Cr for tax audit is only for those assessees who are opting for ITR 3(44AD etc).

Yes... I agreed.

Also I wrongly typed without instead of WITH...

Thank You Madam...

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