Books of account

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2016 if i file return u/s 44AD turnover more then 1000000 then p&l and balace sheet maintain is required or not if total gross income (before deduction) more then exemption limit or net income (i.e. after deduction ) is less then 250000. but profit is more then 8%

Expert : Anonymous

Expert : Anonymous (Expert)

12 December 2016 1. U/s 44AD, the books of accounts are not required to maintain for eligible assessees. 2. The turnover limit is 1 Crore for FY 2015-16 & 2 crore for FY 2016 -17. 3. U can file return only by giving turnover details and profit % being 8 or more. 4. Consider compliances of other applicable tax laws like vat or service tax etc.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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18 July 2024 Under section 44AD of the Income Tax Act, taxpayers engaged in specified businesses can opt for presumptive taxation. Here are the key points related to your query:

1. **Books of Accounts Requirement:**
- Assessees opting for presumptive taxation under section 44AD are not required to maintain regular books of accounts. They can declare their income based on a presumptive profit rate.

2. **Turnover Limit:**
- For FY 2015-16, the turnover limit for eligibility under section 44AD was 1 crore rupees.
- From FY 2016-17 onwards, the turnover limit was increased to 2 crore rupees.

3. **Filing Return:**
- If your turnover exceeds the specified limit (1 crore for FY 2015-16), but your income is below the basic exemption limit (2,50,000 rupees for individuals below 60 years of age), you can still opt to file your return under section 44AD.
- You need to calculate your income using the presumptive profit rate of 8% of turnover or higher. This means you declare at least 8% of your turnover as your income for taxation purposes.

4. **Other Compliances:**
- While section 44AD simplifies income tax compliance, you still need to comply with other applicable tax laws such as VAT (Value Added Tax) or GST (Goods and Services Tax), depending on your business activities.

### Summary:
- **Books of Accounts:** Not required under section 44AD.
- **Turnover Limit:** 1 crore for FY 2015-16, 2 crore from FY 2016-17 onwards.
- **Filing Return:** Possible if turnover exceeds limit but income is below exemption limit, using presumptive profit rate.
- **Compliance:** Ensure compliance with other tax laws applicable to your business.

This approach under section 44AD provides simplicity in tax compliance for small businesses while ensuring that necessary income details are appropriately declared for taxation purposes. For specific situations or detailed advice, consulting a tax professional is recommended.

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