Section 44 ad income tax

 

Sir,

 

I want to ask you the following questions...

 

Whether the interest received from loans and deposits can be included in deemed income for computing 8 percent of the total turnover or gross receipts of a proprietorship concern whose Business is of Cattle feed and Oil Cake.

 

The deemed profit is not arrived 8 percent of the total turnover of such business.However it will be more than 8 percent while including such interest from Loans and deposits.

Replies (5)

Interest Received from loans and deposits is not income from business but from other sources.

So such interest will be taxable separately as income from other sources.

Ashish is absolutely right...

Sec44AD is only applicable to the business income and no other income.

Hence, friend, the interest will not get the benefit of Sec. 44AD.

One thing to clear first of all needs to clear that whether loans and advance given in the course of trade. Sometimes it will possible that we deposit certain some of refundable deposits with our customers or with bank for providing bank guarantees/ LC's so as to avail Bank guarantee/ LC limit. In these cases, it will be a busines income and not other souces income and hence you can avail deemed income cases underr sec 44AD. Please give more clarity abt nature of advance or deposits so that correct advise should be sought.

 

Thanks and Regards,

Manoj B. Gavali

U/S 44AD.....8% IS ABSOLUTE.....NO OTHER INCOME IS INCLUDED....IN BUSINESS INCOME....

44ad applies to only business income not other income(i.e. other head income)

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