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Under 44ad income tax rules

08 March 2018

Under 44AD, what are the requirements to be uploaded like P&L acct, B/Sheet,

Also PLEASE LET ME KNOW IF THE ACTUAL PROFIT IS COMING HIGHER THAN 8% AS PER BOOKS, LETS SAY EXAMPLE 20% , THEN CAN ONE FILE IT RETURN UNDER 44AD ?

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4 Replies

Miss Mansi Bhojani (Practicing Chartered Accountant) (1693 Points)
Replied 09 March 2018

If you opt for 44AD then no books of accounts are required to be maintained if you show net profits above 8% or 8% of your turnover.
Yes the scheme allows higher declaration of income, higher than 8%.

Himanshu Lakhani (35 Points)
Replied 09 March 2018

Thanks Mansi but how IT officer will judge my income if I pay on 8% of my turnover ?

Since No Books of a/c to be maintained, I only have to show my turnover in sales book and bank statement , Ho can he judge whether I have 8% as declared or 10% actually, 12% actually or 20% actually ? Can I deny him if he demands my balance sheets or profit and loss account ?

In form ITR 4 SUGAM, they are asking Sundry creditors, sundry debtors and cash at bank. From these figures , how can he verify the actual profit ? There are so may other expenses which cant be produced since i am not liable to maintain books.

Miss Mansi Bhojani (Practicing Chartered Accountant) (1693 Points)
Replied 10 March 2018

Yes no books required to be maintained so he can not demand for profit and loss or balance sheet but yes he can demand other statements like sales book or bank statement, etc according to the scope.
Generally what I have witnessed and as per my readings is ITO can judge the profit % as per general trend of market % or by comparing with similar or same business doing firms according to what % then must have shown and verify profit in this manner.
There are lesser chances of scrutiny in 44AD as compared to 44AB but yes there are cases of notices.