Presumptive Taxation-Total Income meaning

GTI less Ch VI A and B/f losses both

 

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.

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

" 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)

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...?!

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.....

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...

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

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.

Yes. In both the cases, tax audit not applicable for normal assessment, when not opted for 44AD in preceeding years.