Section 44ad of income tax act 1961

Section 44AD of income tax act 1961

Applicable to whom ?

It is applicable to eligible assessee doing eligible business whose turnover is less than 100 lakhs from assessment 13-14

(Eligible BUSINESS any business EXCEPT plying , hiring  or leasing goods carriages referred in s44AE)

("eligible assessee" means,—(i)  an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and

(ii)  who has not claimed deduction under any of the 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;)

The provisions of this section shall not apply to—

 (i)  a person carrying on profession as referred to in sub-section (1) of section 44AA;

(ii)  a person earning income in the nature of commission or brokerage; or

(iii)  a person carrying on any agency business.

ADVANCE TAX PROVISIONS of chapter XVII-C
The provisions of Chapter XVII-C shall not apply to an eligible assessee in so far as they relate to the eligible business.
however s44 AD(4) may give rise to various issues, however assessee is liable to pay advance tax on his other income as per provision.

 

PRESUMPTIVE INCOME
presumptive income will be 8% of total turnover (or gross receipts of assessee)

higher or lower income -: Assessee at his option can claim higher or lower income than 8%

but if assesee wnat to claim  such lower income than he should fulfill the condition of maintaining of books of accounts and getting them audited.

No deduction allowed under (s30 , till  38 sereas) however in case of partnership firm, remuneration to partner and interest on partners capital is allowable , for the computation of allowable remuneration , book profit will be deemed to be income less interest to partners , further wdv  of any depreciable asset of such business shall be calculated as if depreciation has been actually allowed.


Hope you enjoyed this overview of s44AD

Thank you,
Giriraaj Vyas