Sec 44ad

Tax queries 610 views 3 replies

Naveen Kumar Jain

Chartered Accountant

641 Points Posted on 14 August 2013

Sec 44AD (6) provides that the provisions of Sec 44AD are not applicable to a person carrying on profession as referred to in sub-section (1) of section 44AA;

By implication it will mean that sec 44AD will be applicable to other professions/ vocations that are not referred to in sub-section (1) of section 44AA ?

In other words, persons engaged in any other trade or vocation or occupation (except those specified under sec 44AA(1), can choose to take benefit of sec 44AD.

Shall like to get views of learned members of the Forum.

Replies (3)

CA LOVELY ARORA

C.A. B.Com (H) Graduate

2151 Points Posted on 14 August 2013

Dear Naveen,

you are absolutely right... as this provision is not meant for professionals (sec. 44AA professionals).. because they are required to maintain books of accounts in any case, however, if they would have been covered under 44AD, then they would be required to maintain books only in case their profit is less than presumptive basis, which is logical also.

Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com

Naveen Kumar Jain

Chartered Accountant

641 Points Posted on 15 August 2013

Thanks -- but I wish to know whether persons engaged in professions or vocations or occupations other than professions referred in sec 44AA (1) are covered by Sec 44AD (presumptive income) or not. So far the view was that 44AD does not apply to persons who have income from professions (any profession), but now that sec 44AD (6) specifies that it is not applicable only to professions referred to in Sec 44AA (1), does it follow automatically that it (presumptive income of at least 8% of Turnover) will apply to income from other professions?

CA LOVELY ARORA

C.A. B.Com (H) Graduate

2151 Points Posted on 16 August 2013

Dear Naveen,

It is obvious that sec. 44AD applies to other professions, as it excludes only Sec. 44AA Professions.
The reason is as i stated above... they are not required to maintain books of accounts, and as you know, sec. 44AB or Sec. 44AD Tax Audit requires books of accounts.

Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com