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CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (TaXpert)     15 February 2012

Section 44AD ( Must read it once)

Originally posted by : samkit shah

frndz....i m goin through similar case of our client in my office. In that, client has opened FD/OD a/c in name of Proprietorship and FD interest for the same amounting Rs. 107000 approx. has been credited to P/L a/c. now, His turnover is just of Rs. 705000/- approx. and he has calculated his net profit of Rs. 113000/- including above interest.

Now, if we consider interest income in IFOS then according to section 44AD his presumptive income under B & P will be of Rs. 56400/- approx. (as higher of 44AD or Net Profit as per P/L a/c) and IFOS of Rs. 107000/- (net effect of 163400/-) whereas if we in toto consider the aggregate amount as B & P income then his total income will be of Rs. 113000/- only.

Moreover he is already in 30% tax slab rates...

wht 2 do nw.....wht the provisions exactly says abt

Interest income does not form part of Gross Receipt under section 44AD



 28 Replies

CA Ashwani Agarwal

CA Ashwani Agarwal (Practice)     12 July 2011

Very nice article. But 1 thing which i would like to add on is that you cannot run away from making Books of Accounts just because it is expensive. A person makes books not only for the purpose of income tax but for various other reasons. Otherwise how will you be able to know te value of debtors, creditors, stock, cash balance etc. So please dont think of declaring 8% profit only because it is less expensive. You will still have to maintain books of accounts.

M. N. JHA

M. N. JHA (CA)     12 July 2011

Originally posted by : CA Ashwani Agarwal

Very nice article. But 1 thing which i would like to add on is that you cannot run away from making Books of Accounts just because it is expensive. A person makes books not only for the purpose of income tax but for various other reasons. Otherwise how will you be able to know te value of debtors, creditors, stock, cash balance etc. So please dont think of declaring 8% profit only because it is less expensive. You will still have to maintain books of accounts.

RIGHTLY SAID SIR........WELCOME UR SUUGESTIONS

CA Ashwani Agarwal

CA Ashwani Agarwal (Practice)     12 July 2011

And you rightly said that it seems a little illogical that a person having Turnover of Rs. 60 lakhs should get his accounts audited if he shows NP of 160001, but if he shows NP of 159999 then he is not required.

 

It will be really appreciable if some can make us understand the logic behind this rule..

 

kamal kishor sen

kamal kishor sen (STUDENT Rajasthan)     12 July 2011

Very useful post 

thanks Mr. jha   :)

roameri

roameri (Self-Employed)     13 July 2011

TURNOVER UNDER SECTN. 44AD.
From A.Y. 11/12 the profit shall be estimated at 8% of TURNOVER where total TURNOVER or GROSS RECEIPTS do not exceed Rs.60 lakhs during a year.
Question.
Does TURNOVER or GROSS RECEIPTS to be construed as Sales or as Sales+VAT ?
Thanks,
Jamshed F. Mehta
 

Sunil Panwar

Sunil Panwar (Article Assistant)     13 July 2011

I have 1 query in regard of this section that where it is written that "Salary and Interest to partner allowed:After calculated  presumptive income @ 8 % of turnover in case of partnership firm ,salary and Interest to Partner under section 40b is also allowed"

Please refer source.

varun sahni

varun sahni (NA)     13 July 2011

useful article thanx a lot .....


(Guest)
Originally posted by : kamal kishor sen

Very useful post 

thanks Mr. jha   
CA Ashwani Agarwal

CA Ashwani Agarwal (Practice)     13 July 2011

Originally posted by : Sunil Panwar

I have 1 query in regard of this section that where it is written that "Salary and Interest to partner allowed:After calculated  presumptive income @ 8 % of turnover in case of partnership firm ,salary and Interest to Partner under section 40b is also allowed"

Please refer source.

The section says that it will be assumed that Expenses U/s 30 to 38 are assumed to be allowed while calculating 8% profit. So it obviously doesnt include section 40b. Therefor you can give deduction of section 40b.

 

Regards

CA Ashwani Agarwal

radhika rawat

radhika rawat (student)     13 July 2011

thanks for dis article


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