44ad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 September 2013 Dear Sir,
Practically, what are the benefits of opting Section 44AD. Does it provides any immunity to assessee.

Please advise me.

shivaji prasad bhimavarapu

shivaji prasad bhimavarapu (Expert)
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23 September 2013 Sec 44 AD is applicable to all businesses except agency commissions, Brokerages and Professions. It applies to Individuals,Firms and not to private companies/LLPs. Strictly speaking it does not provide immunity.Only thing is no books of account need to be maintained.In case of Scrutiny, assessee may have to explain the sources of investments etc.,,if required.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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23 September 2013 Benefits:

1. No need to maintain accounts.

2. No need for audit.

3. Thus, compliance cost goes down considerably.

4. Offers you immunity from rigours of section 40-43.

Disadvantages:

1. Minimum profit assumed at 8%. Often profit margin is lesser.

2. though many tax advisors may tell you that once you have offered 8%, you are safe, in reality it may not be true. If during the assessment it is determined that you generated more profit, you shall be taxed further.

3. Offers you immunity against 40-43 but not against TDS provisions. they still apply.

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Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2013 Tds provisions are applicable to those assessees who are liable for audit, but in 44AD assessee require not to audit. Then how is the tds provisions are applicable.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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24 September 2013 who says TDS provision applies only to audit cases? Though certain TDS sections exempt individuals and HUF from deducting taxes unless they are covered under 44AB, do remember that 44AD also applies to partnership firms also which are not exempted under any TDS section as such.