Sec 44 ad presumtive income vs actual income

Tax queries 765 views 3 replies

Q.1 - My actual profit is 15 % and deemed profit as per sec 44 AD is 8 %. Now, can i opt for 8 % u/s 44AD or i have to show profit @ 15 % in return, and if i opt for Presumptive and pay tax @ 8 % u/s 44 AD, can i still maintain books ???

Q.2 - If i can maintain books, what should be the book profit 8% or 15 % ??

Q.3 And if file return @ 8 % u/s sec 44 AD though my actual profit is @ 15 %, can AO demand difference tax @ 15 %-8% ? Can he impose penalty for concealment of income ??

Plz reply its urgent

Replies (3)

You can voluntarily declare 15% profit. 

As per provisions of section 44AD 8% is enough to file the returns. 

If u opted 44Ad no need to maintain books of accounts.. 

2) if you voluntarily declare 15% profit then you have to maintain books of accounts.

3) No AO will not demand you if you opt presumptive basis 

see

1st of all it depends on strategy of  books of tax payer that whether his focus is on to pay less tax or wht?

1st case if i m actually incurring loss in business then why i wil go for declaring 8% profit & paying tax instead of tht i wil go for tax audit opting 44AD.

44AD is not a mechanism to escape income it's just a relaxation given to the assessee that do not maintain any books if u r declaring profit of 8% or more.

But if u r really earning 15 % (i.e. ascertained trhrough whatever books u keep or ur estimates) .u shd declare what u r earning either u maintain books (44AB ) or opt 4 not maintaing them(44AD).

i want to add at last my conclusion that u hv to show what ur earning i.e.

actual profit or 8% of turnover w/e is more & declare that in return so that there is no liability to maintain books of a/c

 

u can ask me further quries if any by calling me at 7566745985


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