Section 44ad

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Chartered Accountant
173 Points Joined November 2013

There is partnership firm showing its income u/s 44ad

Turnover - 1515344

Profit 8% - 121228

Interest to partner - 113592

Remuneration to partner - 9757

Net profit - Nil

Whether it is possible u/s 44ad to have nil income ?

Can it be considered as defective return ??

 

Thanks in advance.

 

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On 02 February 2016 at 13:44 Report
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glidor@gmail.com
21068 Points Joined January 2010

u/s 44AD one has to offer 8% income for tax purpose. or get their accounts audited in case of lower income 

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On 02 February 2016 at 13:53
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Chartered Accountant
1572 Points Joined August 2008

In case of 44AD not possiable for NIL Income and If you go forcely than its a Defective Return and You received Income Tax Notice also for the same.

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On 02 February 2016 at 14:09
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Practising CA
449 Points Joined September 2013

Partnership firm, can claim further deduction of remuneration and interest paid to its partners within the limit specified under section 40(b).

I believe you can very well file ROI u/s 44AD

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On 02 February 2016 at 15:40
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Practice
425 Points Joined September 2009

ITR can be filed u/s 44AD with nil income provided interest & remuneration paid to partners is as per sec 40 as mentioned by Mr. Singh.

Regards

CA Shivani Mittal

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On 02 February 2016 at 16:33
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Student CA Final
21 Points Joined August 2013
Yes it considered as defective return. Return can be file as you can take income 8% of gross turnover and then claim deduction of interest u/s 40(b) after this you find book profit and then you can claim remuneration as dedution according to aforesaid section. Through this process you can be file the return.
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On 02 February 2016 at 17:22
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CMA
13117 Points Joined May 2009

I agree with Jaspal & Shivani.

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On 02 February 2016 at 17:25
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3 Points Joined November 2015
Proviso to sec. 44AD(2) states that if it is a partnership firm salary and interest can be deducted as per limits specified in Sec. 40(b)..
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On 02 February 2016 at 21:57
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CA
208 Points Joined December 2008
U/s 44AD Net profits should be 8% before providing remuneration and interest on capital, once your profits are 8% of your sales then you are free to provide interest and remuneration upto 150000
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On 03 February 2016 at 00:56
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accountant
362 Points Joined May 2011

agreed with Mr parveen

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On 03 February 2016 at 07:28
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Proprietor
23 Points Joined January 2016
You can file roi with nil income after claiming deduction of interest and remuneration, which not be considered as defective return, make sure income is nil and not negative o after above deduction otherwise will a defective return
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On 03 February 2016 at 09:37
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Chartered Accountant
173 Points Joined November 2013

Thanks all

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On 03 February 2016 at 10:21
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student
143 Points Joined November 2013
The remuneration here is to be restricted to the extent of 8% of the profit less interest on capital
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On 04 February 2016 at 16:04


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