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Sec 44ad for FY 2016-17

ankita gandhi (student) (5903 Points)

20 December 2016  
Government decides to reduce the existing rate of deemed profit under section 44AD of the Income Tax Act in respect of amounts/receipts through banking channel/digital means
.
In order to achieve the Government’s mission of moving towards a less cash economy and to incentivise small traders / businesses to proactively accept payments by digital means, it has been decided to reduce the existing rate of deemed profit of 8% under section 44AD of the Act to 6% in respect of the amount of total turnover or gross receipts received through banking channel / digital means for the financial year 2016-17. However, the existing rate of deemed profit of 8% referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash.
.
Legislative amendment in this regard shall be carried out through the Finance Bill, 2017.

 2 Replies

Nitin Bhuta (Chartered Accountants) (688 Points)
Replied 20 December 2016

Yes your understanding is correct.

Rohan Junankar (Practise) (36 Points)
Replied 18 March 2017

If assessee was covered under tax audit in AY 15 16 , WHETHER HE CAN OPT FOR 44AD AS as turnover does not exceeds 1 cr. In AY 2016-17


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