18 March 2014
if the turnover is below 1cr the income declared should be higherthan 8%.
As per the regular books of accounts maintained: (as per the profit and loss account) my total turnover is Rs.75.00 lakhs Expenses before dep dr to P&L Rs.(68.05) Lakhs Depn on computers debited @ 10% (Rs.0.80) Lakhs (book value 8.00 lakhs) Net profit as per P& L Rs.6.15 Lakhs (after all the expenses and dep debited to P&L)
Question: In statement of Income computation sheet Net Profit Rs.6.15 Lakhs Add: Dep @ 10% dr Rs.0.80 Lakhs -------- Rs.6.95 Lakhs Less : Dep allowed 60%Rs.4.80 Lakhs -------- N/P chargeable to tax Rs.2.15 Lakhs
whether the section 44AB is applicable because the ultimate N/p rs.2.15 Lakhs falls below 8%. or 44AB does not apply because the n/p as per P&L Rs.6.15 Lakhs is 8.20%
18 March 2014
1. Section 44AB provides that a sum equal to 8% of the total turnover shall be deemed to be the PROFITS and GAINS of business chargeable to tax under the head "Profits and gains of business or profession
2. In simple words the NET INCOME should be 8%
3. In your case the net income is less than 8%. Accordingly, you have to get your accounts audited.
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