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Rebate u/s 87A with 44AD

Sagar padhi (Articled Assistant) (69 Points)

07 October 2017

Can rebate be used if assess opt for 44AD .....

Eg.1...1 crore turnover ...so u/s 44AD 8% profit is declared i.e. Rs. 800000 so here Rebate cant be used although it is under 44AD

Eg.2...5500000 Turnover ...so now u/s 44AD 8% profit is declared i.e.440000 ....Now my query is it is below 500000 that is 440000 now rebate can be used u/s 87A ?

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67 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 07 October 2017

Correct for AY 2017-18.

(assuming gross taxable income of Resident Individual below 5 lakhs)

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 07 October 2017

Good Morning My Dear Dhirajlal Rambhia Sir ....

Yesterday I face a different case...

A client's (partnership) T/O 1.70cr. Also rent paid and deduct TDS for the Rent...

But, Now the situation papers not satisfied / clear.... My query

1. Can I treat u/s 44ad...?

2 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 07 October 2017

Very Good Morning Dear........

What do you mean by ........."Now the situation papers not satisfied / clear"..........

I have not undersood the real problem........

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 07 October 2017

Dear Sir,
Sorry to say...!
How To I give the details here...? So, I ask it Presumably...

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 07 October 2017

Well, For eligible business the ITR can be filed for partnership firm u/s. 44AD.

As the TDS for this year is deducted, that doesn't restrict its eligibility, but the date of filling u/s. 139(1) is over............. so, if audit not possible........ go for u/s.139(4) filling....... but any losess would not be carried forwarded.

2 Like

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 07 October 2017

Yes. I think the "BUSINESS" is eligible (Tiles trading). Also the account fall loss their activities.
But, My view the loss is not right/correct...
In 44ad ll show profit 8 % (as per rule)

Can I show it loss u/s 44ad...?
Or Only show it 8% profit...?

(The trader ready to pay tax @ 6lakhs...)

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 07 October 2017

If Audit problem....... and loss not required to carry forward.......... declare 6% on bank + 8% on cash transactions under 'no account case'......... tile trading... eligible for 44AD when 1.70 Cr turnover in FY 2016-17.

Estimated tax liability [1.7Cr * avarage 7%] * 30% tax slab for firm...... plus interest u/s. 234 ...........

Good Luck.......

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 07 October 2017

Thank you for the reply Sir.,
One more please...
If show 44ad and also with loss (without c/f)....?
Please give me any availability for showing loss.... If it's available...?

2 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 07 October 2017

When we declare 8% average profit margin.......... means question of loss doesn't arise......

1 Like

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 07 October 2017

Yes Sir.,
I fully accepted this opinion. Also I asked above too much...

But, Why I ask above question (Loss and C/f)

"Loss not required to C/f". I meaned it without c/f the loss

2 Like

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 07 October 2017

*I meaned it without c/f the loss can file the return as of loss. Then only I ask this....

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 07 October 2017

Yes.

Presumptive assessment u/s. 44AD.......... means minimum 6 or 8% PROFIT.......... if want to declare any thing below section 44AB (tax audit) applicable.

But there is chance to file loss ITR for partnership firm u/s. 44AD, as tax audit not applicable......

Read: If the assessee does so, i.e., declares lower income and his actual income exceeds the maximum amount which is not chargeable to tax, (for partnership firm it is zero) then the relief from maintenance of books of account is not available and he is required to maintain the books of account as per section 44AA and further, he has to get such books of account audited as per section 44AB.

Refer: Tutorials/Section-44AD-Theory.

So, if there is no other income and total loss in the business, the firm can be assessed under presumptive asessment, i.e. tax audit liability will not be applicable as per section.44AD(5)

1 Like

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 07 October 2017

Sir, 🙏🙏🙏
I really....... (no more words of my thanks)

1 Like

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 07 October 2017

Sir,
Please one more question...
As of above way I stand as following... (In CAs we touch 44ad)
1. Show the profit 8% / 6%
2. Don't be show less than above. If less than 44AB applicable.
3. In case we show loss then we can use 44ad.
4. If show it loss and base 44AA then 44AB applicable.....
5. No need books of accounts if show loss sec 44ad....

So,
I use above said points in that accounts...
Am I Right Sir...?
Please correct me if I am wrong...!!!