My clients are having the following business. Please tell me whether Section 44AD of Income Tax is applicable to them.
1) A firm engaged in manufacturing and works contract of steel items.
2) An individual engaged in consultancy services and receiving amount termed in bill as Professional services from his clients.
3) A Doctor whoe turnover is 2100000/- during FY2010-11
For applicability of 44AD you have to verify turnover/Gross Receipts of the assessee from all business.
If T.O is < 60 lakhs he has to offer 8% of T.O as income as per 44AD of Income Tax Act.
If income is less than 8%, then accounts must be audited by a Chartered Accountant and a lower income can be filed
According to Section 44AD eligible assessee means a person engaged in any business (whether it is retail trading or wholesale trading or civil construction or any other business) except the business of plying, hiring or leasing goods carriages referred to in section 44AE
Section 44AD is applicable only to Individuals , HUF & firms.
Firms can claim salary & Int to partners can be claimed from above 8% (limited to S.40(b))
I think Doctor income will be profession fee, as the section says business he wont be covered undered under 44AD .
Remaining 2 categories will be covered under 44AD
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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CAclubindia
