Section 44AD query

(1) Including vat/GST/Indirect taxes.

(2) Component of gross sales (Vat/GST Included) received in cash will qualify for 8% rate and Component of Gross Sales (Vat/GST Included) received through banking channels(Checks/Drafts/NEFT/RTGS/IMPS etc)/electronic modes will qualify for 6% rate.

(3) This depends on the way of accounting you have adopted since the day you started your bussiness , revenue recgnition can be Accrual/mercantile system based or cash/actual reciept based ...whatever system one opts should remain consistently with that system only for future financial years ... that said, as per  recent ICDS rules even presumtive taxation based assesse should follow  Accrual/mercantile system only for revenue recognition of the bussiness .

(4) No Balance sheet or P/L account needed when filing under presumptive taxations Schemes .

What else you want to know..? you can post here your specific queries ... experts here in this forum  will definitely help you with them ...

thank you Mr. Saifulla for your reply...
continuing my query in point 3 I have heard that to claim 6% profit.. amount of turnover should be received before filing of tax returns...and if it is true then the amount remaining to be received will be chargeable at 8%.
Another thing I want to Know about section 44AD is that for example a small proprietor has annual turnover of Rs 30 lakhs and he receives money by digital mode..so his total income will be 6% i.e Rs 1.80 lakhs which below exemption limit so he doesn't have to pay tax. But now he knows that his actual profit is more than 1.80 lakhs, say 5 lakhs, then also he can claim 6% as his income..
Regards

Originally posted by : Dhaval
	thank you Mr. Saifulla for your reply...continuing my query in point 3 I have heard that to claim 6% profit.. amount of turnover should be received before filing of tax returns...and if it is true then the amount remaining to be received will be chargeable at 8%.

 

Yes , your are right .... 

 

Originally posted by : Dhaval
	thank you Mr. Saifulla for your reply...continuing my query in point 3 I have heard that to claim 6% profit.. amount of turnover should be received before filing of tax returns...and if it is true then the amount remaining to be received will be chargeable at 8%.Another thing I want to Know about section 44AD is that for example a small proprietor has annual turnover of Rs 30 lakhs and he receives money by digital mode..so his total income will be 6% i.e Rs 1.80 lakhs which below exemption limit so he doesn't have to pay tax. But now he knows that his actual profit is more than 1.80 lakhs, say 5 lakhs, then also he can claim 6% as his income..Regards

This exact query/question cropps up every now and then here in forum ....so ..in a single statment one answer is " YES its absolutely legal to declare/deem at least  8%/6% (as the case may be) of total gross reciept as the final  taxable income when opting special presumtive taxation provisons like 44AD " .

When under these special provisons the key words to remember are "Gross Receipts,Turnover Presumed , Deemed " not the word "Actual Profit " 

that said ...don`nt be greedy(no offence)  ... yours is lower slab income (just 5%) so Tax burden will not me much on same...so think accordingly ... give back to nation  your share of the income  what the nation deserves ....... Long Live my country ...  Jai Hind ....

1. For calculation of turnover which amount is to be considered, including tax or excluding it.. (Exluding All taxes)

2. whether 8%/6% rate is applicable on actual turnover or cash receipt ( both difference 8% for cash sale and 6% for digitel sale )

3. in case if the money is received after the end of F.Y then for which year this amount is to be taken (as date  invoice book in a/c book )

4. while filling itr do we need to show any balance sheet details etc...(no is follow condition  44 AD  and Presumptive  ratio , 44 AB,)

 

Originally posted by : Mukesh Kumar
	1. For calculation of turnover which amount is to be considered, including tax or excluding it.. (Exluding All taxes)

No, the Turnover/Gross Receipts for 44AD purpose should be arrived at after " INCLUDING "  GST/VAT .

MR.ABC FOLLOWS MERCANTILE BASIS ACCOUNTS U/S 44AD .TOTAL TURNOVER 130 LACS OUT OF

25 LACS BY A/C PAYEE CHEQUE

25 LACS BY A/C PAYEE DRAFT BEFORE ROI 

30 LACS NOT RECEIVED UPTO  ROI

50 LACS BY CASH DURING YR

CAN U PLEASE CALCULATE AMOUNT OF DEEMED PROFITS

50L* 6% +++ 80L* 8% minimum.

i.e, 9.4L as deemed profit u/s. 44AD.