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Sec 44ad to outdoor caterers


Harshad Natu (Student- CA Final)     12 March 2013

Harshad Natu
Student- CA Final 
 1 likes  59 points

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Assessee is HUF engaged in the business of Outdoor Catering in Maharashtra. He is paying Maharashtra VAT and Service Tax as per applicable rates. His total Turnover is Rs 60,000,00/- (including VAT & Service Tax amount Collected from customers and paid to respective Authorities)  His actual profit as per books of Accounts maintained by him is Rs 12,000,00/-

Can he declare lower income U/s 44AD @ 8% of his turover ie. 4,80,000 (60,000,00 X 8%)?

raghavender upadhyay

raghavender upadhyay (B.Com, LLB, CA FINAL)     12 March 2013

raghavender upadhyay
B.Com LLB CA FINAL 
 24 likes  331 points

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Yes. Sec 44 AD can be applied.

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Manoj B. Gavali

Manoj B. Gavali (Tax Professional and in Service)     12 March 2013

Manoj B. Gavali
Tax Professional and in Service 
 171 likes  1537 points

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he can declare his income u/s 44AD @ 8% even though such income is below your actual income.

 

But you cannot declare your income below 8% of total turnover. If you want to do that you need to get your accounts audited u/s 44AB tax audit case from chartered accountant before the due date of fiing of return

 

Further, please note that your tota turnover doesnt include your VAT/Service tax iability and payment. So exclude it for calcuating turover for section 44AD

 

Thanks and regards

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Harshad Natu

Harshad Natu (Student- CA Final)     15 March 2013

Harshad Natu
Student- CA Final 
 1 likes  59 points

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Dear friends,

There are 2 opinions in this matter. The wording of the section is

Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”.

There are some opinions which say that the interpretation is 8 % or More. 

I think lot of discussion is required in this regard... 

 

so I request all experts / Member to express their views on the section


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