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Presumtive income

divyesh (Partner) (107 Points)

16 July 2011  

We are partnership Firm engaged in retail business, As Per books our turnover is50 lakhs and Gross profit comes to 2 lakhs, Which is 4%.



Can i file my return for AY 2011-12, under presumtive income declaring income @ 8% of turnover, claim interest to partner and remuneration as deduction and pay tax on rest of the profit ?



Do we have to get our books audited ?





With Regards

Divyesh


 15 Replies

U S Sharma (glidor@gmail.com) (21031 Points)
Replied 16 July 2011

its better to get audited to avoid future litigations, as firms income is always recomended for audit ..........

Anshu Garg (working) (139 Points)
Replied 16 July 2011

YES SIR,

ACC. TO ME , UR TURNOVER IS BELOW THEN 60 LAKH RS.  WHICH COMES UNDER PRESUMPTIVE TAXATION.

DEFINITLY U SHOULD SHOW UR PROFIT @ 8 % AND CAN FILE ITR AND NO NEED OF AUDITING UR ACCOUNTS BUT

IF U SHOW PROFIT LESS THEN @ 8% OF tURNOVER THEN YOU MUST AUDITED UR ACCOUNTS UNDER SEC. 44 AB AND ALSO MAINTAIN BOOKS AS PER SEC. 44AA.

PRESUMPTIVE TAXATION SCHEME IS APPLICABLE ON ALL ASSESSES EXCEPT COMPANIES , LLPS.

CA Shefali Gauba (searching for JOB) (45 Points)
Replied 16 July 2011

 


"ACC. TO ME , UR TURNOVER IS BELOW THEN 60 LAKH Rs. WHICH COMES UNDER PRESUMPTIVE TAXATION.

DEFINITLY U SHOULD SHOW UR PROFIT @ 8 % AND CAN FILE ITR AND NO NEED OF AUDITING UR ACCOUNTS BUT

IF U SHOW PROFIT LESS THEN @ 8% OF tURNOVER THEN YOU MUST AUDITED UR ACCOUNTS UNDER SEC. 44 AB AND ALSO MAINTAIN BOOKS AS PER SEC. 44AA.

PRESUMPTIVE TAXATION SCHEME IS APPLICABLE ON ALL ASSESSES EXCEPT COMPANIES , LLPS."


Agreed with Mr. Anshu

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 16 July 2011

Originally posted by : Anshu Garg

YES SIR,

ACC. TO ME , UR TURNOVER IS BELOW THEN 60 LAKH Rs. WHICH COMES UNDER PRESUMPTIVE TAXATION.

DEFINITLY U SHOULD SHOW UR PROFIT @ 8 % AND CAN FILE ITR AND NO NEED OF AUDITING UR ACCOUNTS BUT

IF U SHOW PROFIT LESS THEN @ 8% OF tURNOVER THEN YOU MUST AUDITED UR ACCOUNTS UNDER SEC. 44 AB AND ALSO MAINTAIN BOOKS AS PER SEC. 44AA.

PRESUMPTIVE TAXATION SCHEME IS APPLICABLE ON ALL ASSESSES EXCEPT COMPANIES , LLPS.

agreed                                                                              

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 16 July 2011

instead of doing this..prefer to do audit

PREMKKUMAR (RETIRED) (30 Points)
Replied 16 July 2011

Read this article

/articles/critical-analysis-of-section-44ad-9048.asp

2 Like

Satvir Singh (Newly minted CA) (1733 Points)
Replied 17 July 2011

can income from insurance commission be dealt under presumptive income??? actual income vis-a-vis commission earned is abt 70-80%, but can it be shown was 8% ??

 

Other incomes of assess include capital gains, house rent, bank interest and agriculture income. Which ITR he should file??

 

THANKS IN ANTICIPATION

CA Bhanwar Borana (Partner ) (397 Points)
Replied 17 July 2011

Dear Singh Litt, i read a article in one of the Taxation news letter that we can show insurance commission income under Sec 44AD(Presumptive income), but as per my opinioun its not correct coz 80-90% comm. is as income for agent. This matter i discus wid frds then 1 of frd. said that in IT act a Sec. says that Agent can't shows Expenses more then 20000/-  so i think it is disputable matter. I advise go with ITR4

1 Like

hiren gala (artical) (41 Points)
Replied 17 July 2011

But Can't we File the Retail business Income inocme under 44AF showing only  5% of Turnover rather then go with 44AD as an 8% of Turn over & to show income as presumtive income

krishna Patel (M.COM. CA FINAL CS Professional(Final))   (420 Points)
Replied 17 July 2011

agreed with mr. anshu garg......

Satvir Singh (Newly minted CA) (1733 Points)
Replied 17 July 2011

Originally posted by : hiren gala
But Can't we File the Retail business Income inocme under 44AF showing only  5% of Turnover rather then go with 44AD as an 8% of Turn over & to show income as presumtive income

Sec. 44AF has been discountinued and merged into 44AD from current financial year

Roopali Kadam (CA cleared- In Job) (1393 Points)
Replied 17 July 2011

Originally posted by : Anshu Garg

YES SIR,

ACC. TO ME , UR TURNOVER IS BELOW THEN 60 LAKH WHICH COMES UNDER PRESUMPTIVE TAXATION.

DEFINITLY U SHOULD SHOW UR PROFIT @ 8 % AND CAN FILE ITR AND NO NEED OF AUDITING UR ACCOUNTS BUT

IF U SHOW PROFIT LESS THEN @ 8% OF tURNOVER THEN YOU MUST AUDITED UR ACCOUNTS UNDER SEC. 44 AB AND ALSO MAINTAIN BOOKS AS PER SEC. 44AA.

PRESUMPTIVE TAXATION SCHEME IS APPLICABLE ON ALL ASSESSES EXCEPT COMPANIES , LLPS.

agreed

Bhavi ( CA) (82 Points)
Replied 17 July 2011

For Insurance commission, it is a debatable matter. In order to avoid litigation and computerised selection for scrutiny, file as INCOME FROM BUSINESS and show your Net Profit marginally more than Flat 8%.  If you show more than 8% NP, regular provisions of Income TAx shall be applicable.

ashutosh bhardwaj (Law) (43 Points)
Replied 17 July 2011

Gdm Dear Divyesh,

As you are Partnership Firm. As Per books your turnover is Rs. 50 lakhs and Gross profit comes to Rs. 2 lakhs., Which is 4%.


You can file Income Tax return for AY 2011-12,

on Presumtive Basis u/s 44AD

declaring income @ 8% of turnover,

and u/s 44AD(2) you can claim interest to partner and remuneration as deduction

and pay tax on rest of the profit ?

No, you dn't have to get our books audited as well.

 

From :

Ashutosh Bhardwaj

Vns

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




With Regards

 




ACC. TO ME , UR TURNOVER IS BELOW THEN 60 LAKH Rs. WHICH COMES UNDER PRESUMPTIVE TAXATION.

DEFINITLY U SHOULD SHOW UR PROFIT @ 8 % AND CAN FILE ITR AND NO NEED OF AUDITING UR ACCOUNTS BUT

IF U SHOW PROFIT LESS THEN @ 8% OF tURNOVER THEN YOU MUST AUDITED UR ACCOUNTS UNDER SEC. 44 AB AND ALSO MAINTAIN BOOKS AS PER SEC. 44AA.

PRESUMPTIVE TAXATION SCHEME IS APPLICABLE ON ALL ASSESSES EXCEPT COMPANIES , LLPS."


Agreed with Mr. Anshu


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