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Presumptive Taxation-Total Income meaning

Anonymous (Business) (240 Points)

26 October 2018

Hello,

What is meant my 'Total Income' here that if exceed BEL then tax audit required (when we declared less than 6 /8 %)

It is
GTI or GTI less Ch VIA deduction
or GTI less B/f losses only
or GTI less Ch VI A and B/f losses both.

Thanks

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15 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 26 October 2018

GTI less Ch VI A and B/f losses both

1 Like

RAJA P M ("Do the Right Thing...!!!") (127076 Points)
Replied 26 October 2018

Dear Mr Dhirajlal Rambhia Sir.,

Good Evening Sir...

Please "I can't understand Your reply Sir...!"

Explain once again...

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 27 October 2018

Good Morning, Dear....

The query is specifically asked for the interpretation of 'Total Income' as incorporated in sec. 44AD/ADA ...

As per sec. 2(45) of IT act....... "total income" means the total amount of income referred to in section 5, computed in the manner laid down in this Act

Section 5 determines the scope of total income for a resident or a non-resident assessee. It follows that for a resident assessee, the total income include all income that accrue, arise, earned or received.
However various chapters and sections of the Income tax Act further lays down which income would not form part of total income, computation to be made, clubbing of Income, set off or carry forward of loss and deductions to be made in computing total income.

2 Like

RAJA P M ("Do the Right Thing...!!!") (127076 Points)
Replied 27 October 2018

Originally posted by : Dhirajlal Rambhia
	Good Morning, Dear.... The query is specifically asked for the interpretation of 'Total Income' as incorporated in sec. 44AD/ADA ... As per sec. 2(45) of IT act....... "total income" means the total amount of income referred to in section 5, computed in the manner laid down in this Act Section 5 determines the scope of total income for a resident or a non-resident assessee. It follows that for a resident assessee, the total income include all income that accrue, arise, earned or received. However various chapters and sections of the Income tax Act further lays down which income would not form part of total income, computation to be made, clubbing of Income, set off or carry forward of loss and deductions to be made in computing total income.

GOOD MORNING MY DEAR SIR.,

Thank You for the Repy Sir...

But., My Doubt is "GTI less Ch VI A and B/f losses both"

How is it possible GTI - Ch VI-A...?

After less Ch VI-A is Taxable Income. But, Presumptive tax calcultaed Total T/O @ 8/6% = GTI (it will come 8/6%) after deduct Ch VI-A...

Then How Sir...?

I confused now based on thi one --->>> GTI less Ch VI A and B/f losses both

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 27 October 2018

" Presumptive tax calcultaed Total T/O @ 8/6% = GTI (it will come 8/6%) after deduct Ch VI-A..."

Yes, you are correct when you wish to declare income u/s. 44AD...... Gross turnover is taken into consideration.

Now, consider when you declare less than 6/8% profit margin.......... so, the question arises of audit !!!

At this jucture the 'Total Income' comes into picture (and not Total Turnover)

2 Like

Anonymous (Business) (240 Points)
Replied 27 October 2018

Gm sir

That means tax audit can be avoided by making investment u /s 80 C and bring GTI below BEL in case GTI is salary income only (whereas B/f losses will come into picture only when we have businees profit this year.)

RAJA P M ("Do the Right Thing...!!!") (127076 Points)
Replied 27 October 2018

Originally posted by : Dhirajlal Rambhia
	" Presumptive tax calcultaed Total T/O @ 8/6% = GTI (it will come 8/6%) after deduct Ch VI-A..." Yes, you are correct when you wish to declare income u/s. 44AD...... Gross turnover is taken into consideration. Now, consider when you declare less than 6/8% profit margin.......... so, the question arises of audit !!! At this jucture the 'Total Income' comes into picture (and not Total Turnover)

Thank You Sir.,

It's mean GTI takes all the documents which is shown in the returns. Am I correct Sir...?!

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 27 October 2018

With little difference.......... Not GTI........ But 'Total income' [which as per sub-sec. 2(45) is net taxable income] takes care of all the deductions.....

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 27 October 2018

Dear Vikas,

If you do not have any income under 'PGBP' in previous year, question of audit or adjustment of b/f losses doesn't arise. So, first be clear of your query....as presumptive assessment u/s. 44AD is for presumptive (eligible) business only and not for salary income...

1 Like

Anonymous (Business) (240 Points)
Replied 27 October 2018

case of salaried employee doing f&o as well.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 27 October 2018

Yes, F&O trading is business....... & assessed u/h. PGBP......

Anonymous (Business) (240 Points)
Replied 27 October 2018

case of salaried individual doing f&o as well

Anonymous (Business) (240 Points)
Replied 27 October 2018

Thanks. sir, To be more specific Let;s say if an salaried individual with f&o business turnover less than 1cr. and having loss then his total income will be checked for aplicability of tax audit. If it cross BEL then tax audit required. So my main doubt was if a person income cross BEL because he also has salary income which is just above 2.5 lacs whether his 80 C investment of 50 K will be consider or not because after deducting this Total income falls below BEL and he can skip tax audit of f&o business. Sir, you have cleared my doubt that taxable income will be checked here and not GTI. In other case ,if he has profit this year but less than 6% of turnover , if this profit above BEL let say 3 .5 lac profit, but he has b/f losees of 1.6 lacs then after adjustment of B/F losses of 1.6 lacs total income remain 1.9 lacs only and being below BEL no need of tax audit arises. I think I got it now .Yes, of course 44AD filer dont carry b/f lossess as he declare 6% in p.y. but when a normal assesee wish to file ITR having b/f losess too( who never filed under sec 44AD earlier and even not breaking 5 yr condition.is an separate issue) then its has been said by some people that you are declaring less than 6% and income also above BEL so tax audit apply.