DUE TO MANY DOUBT ON SEC 44AD, I WILL TRY TO RESOLVE IT HERE..........MAY BE SOME HELPFULL FOR US
The salient features of the new presumptive taxation scheme are as under:
The scheme is applicable to individuals, HUFs and partnership firms excluding Limited liability partnership firms. It is also not be applicable to an assessee who is availing deductions under sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading “C.—Deductions in respect of certain incomes” in the relevant assessment year.( I M NOT ABLE TO UNDERSTAND IT FULLY, PLS ANYONE EXPLAIN IT)
The scheme is applicable for any business NOT ON PROFESSION(excluding a business already covered under Sec. 44AE) which has a maximum gross turnover /gross receipts of 60 lakhs.
The presumptive rate of income is prescribed at 8% of gross turnover /gross receipts.
An assessee opting for the above scheme is exempted from payment of advance tax related to such business under the current provisions of the Income-tax Act.
An assessee opting for the above scheme is exempted from maintenance of books of accounts related to such business as required under section 44AA of the Income-tax Act.
An assessee with turnover below60 lakhs, who shows an income below the presumptive rate prescribed under these provisions, in case his total income exceeds the taxable limit, required to maintain books of accounts and also get them audited.( ISKA MATALAB HAI KI YADI USKI TOTAL INCOME TAXABLE LIMIT SE KAM HAI TO USKO AUDIT KARWAN JARURI NAHI HAOGA, PAR YE PARTNERSHIP KE CASE MAI NAHI HO SAKATA)
FOR EXAMPLES:
TOTAL TURNOVER 25,00,000 IN CASE OF INDIVIDUAL, THEN 8% PROFIT COMES TO 2,00,000 BUT NOW IF
PROFITS COME TO 180000, THEN AUDIT IS COMPULSORY
&
IF PROFITS COME TO140000 OR LOSS THEN AUDIT IS NOT COMPULSORY BECAUSE TOTAL INCOME IS LEES THEN MAXIMUM INCOME CHARGABLE TO TAX.
(ISE KAHATE INDIA KA INCOME TAX LAW ??????????)
Presumptive Income OR AUDIT ?????
Just pay avg 2667 a Month :So if a Individual is running a business and sale of the business suppose is 60Lakh(less than 60lakh as per above section) then is presumptive Income is 8 % of 60 Lakhs =4.80 lakhs .
Income Tax on 4.80 Lakh, as per Income tax slabs for 2010-11 Financial year is 10% of 320000(480000-160000)=32000.
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 .
Opt scheme or Obtain Audit report:
so Individual /Partnership Firms(other than LLP) may relax form Income tax worries by paying Avg2667 a month ,if business turnover is less than 60 lakh.Further If person does not opt for this scheme he has to maintain books of account and has to obtain audit report on it.I think to maintain books of accounts and then got them audited From CA is more expensive than paying32000/- as Income Tax .
No Books of Accounts :To opt this scheme one should have to maintain the so much record so that Turnover of Business can be ascertained like sale bill etc .No need to maintain any cash book ,ledger etc etc.No need to maintain Balance sheet ,Profit and loss etc.Further keep one point in mind that this exemption is available under Income Tax Act only and if Book are required to be maintained under the provision of any other act than books of accounts has to be maintained under that act .
No Books/No Tax up to 2000000 of sales : as per section 44AA books of accounts is require to be prepared if turnover is more than 1,20000.But under this new,if your Business turnover is 20 Lakhs and you opt for this scheme than taxable income is calculated at 1.60 lakh (8 % 20 Lakh).and for individual, tax exemption limit is also 1.60 lakhs (even higher for female/sr citizens ) .so person who opts this section 44AF is not required to pay any tax if Business turnover is upto 20 lakhs and also exempted to maintain books of Accounts.so persons upto Business turnover upto 2000000 must adopt this scheme.
Doubts on TDS provsion: Tds sections are applicable on Individual deductor under salary and on all section in case of partnership Firms .The above section has not extended the exemption of tds to person opted for this scheme which is very big drawback for this scheme .So I request to Govt to give exemption on Tds provision to person ,who is opted this scheme.
Applicability – These amendments have been made applicable with effect from 1st April, 2011 and will accordingly apply in relation to assessment year 2011-12 and subsequent assessment years.
THANKS WITH RGDS
MR. JHA
(NOTE:- PLS CORRECT ME IF I M WRONG ANYWHERE)
SOURCE:- simpletax
CAclubindia
