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Sec 44ad

Yash. (Final CA Student) (76 Points)

16 July 2013

Is Income From Speculative Business (Day Trading of Shares) covered u/s 44AD ?

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2 Replies

Deepak Gupta (CA Student) (15922 Points)
Replied 16 July 2013

Originally posted by : Yash.
	Is Income From Speculative Business (Day Trading of Shares) covered u/s 44AD ?

44AD covers all assessees carrying on 'eligible business' except professionals as referred to in section 44AA(1), a person earning income in the nature of commission or brokerage, a person carrying on any agency business.
.
'eligible business' means:-

(i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and

(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of one crore rupees.
.
Therefore, any business also includes speculative business.

Dinakar C Korishettar (TRP) (42 Points)
Replied 19 July 2013

Dear Sir,

Kindly clear my bellow doubts atleast 5 days before first due date to file the ITR.

Assessee Details…

Status: Individual
Previous year (F.Y. 2011-12) there is a business loss. Tax Audit done as the business Turnover was more than Rs 60 Lakhs.
Other previous years income exceeds the maximum amount, which is not chargeable to income-tax and so tax audited.
For the Financial Year 2012-13 (A.Y. 2013-14) net profit (Rs 1,12,478 {1.32%}) is bellow maximum exemption limit and there is an agricultural income of Rs 9,58,498. And business Turnover (Rs 85,03,769) is less than 1 Crore.
He has been maintaining his books of accounts regularly.

Please guide…

Can any Tax Consultant or TRP file his ITR4, if it is not a Tax Audit case?
Which one is the last due date to file his return, if it is a Tax Audit case?

Please guide me whether his books of accounts have to be tax audited this year also or he can file his return without tax audit.

Because...

I am not clear about the clause inserted in Section 44 AB(d).

44AB. Every person,—

[(d) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,]

get his accounts of such previous year 67[***] audited by an accountant before the specified date

After reading this section some doubts will arise…

‘if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD’ what’s it’s meaning?
Whether every turnover bellow one crore is to be considered as said in section 44AD?
‘and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year’ what’s it’s meaning? Because ‘any previous year’ means whether n number of previous years or only one earlier previous year?
Is there any category like General Assessee, 44AB Assessee, 44 AD Assessee and so on?

Kindly clear my doubts.

Thanks with regards

Dinakar C Korishettar

email: dinakarkc @ hotmail.com

M: 9008549337.