Reg Section 44AF and Tax Audit Report

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2010 Sir, In case of Assessee where section 44AF is apply but the assessee is claiming less income then TAX audit is applicable to him.

Pls tell what will be the tax audit report format in this case

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 October 2010 Form 3CB and 3CD may be used in view of section 44AF(5) of the Income tax Act,1961.

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2010 sir whether any disclosure is required in this regards in form 3cd OR Notes to the accounts for claiming less income than the presumptive income u/s 44af

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Ajay Mishra

Ajay Mishra (Expert)
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13 October 2010 Hi

Special provision for computing profits and gains of retail business (Section 44AF)

Applicable upto A.Y.2010-11

Applicability

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Section 44AF applies to all the assessees having profits & gains from retails trade of any goods or merchandise and whose total turnover from such business does not exceed Rs. 40 lakhs.

Presumptive Income

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Profit as per this provision would be a sum equal to 5% of the total turnover of the assessee from such business of retail trade or as the case may be a sum higher than the aforesaid sum as declared by the assessee voluntarily in his return of income and the same shall be chargeable to tax under the head Profits and gains of business or profession:
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No further deductions allowed : once the income is declared under this section on Presumptive basis, all the deductions allowable under the provisions of sections 30 to 38 (including depreciation on assets) shall be deemed to have been already allowed, and no further deduction under those sections shall be allowed. However in case of firm, salary and interest paid to the partners shall be allowed as deduction subject to conditions and limits specified in clause (b) of section 40.

Lower Income and consequences

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Income lower than the presumptive income: Any assessee declaring lower profits and gains than the profits and gains specified under this section shall be liable keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and shall also be liable to get his accounts audited and furnish a report of such audit as required under section 44AB.]

Turnover not to be included in other receipts

Where the assessee chooses to declare income on the basis of provisions of this section, the turnover of the said business or income as the case may be shall not be included in the turnover or income of other business if any carried on by the assessee, for the purpose of provision of section 44AA or 44AB of the Act.

Ajay Mishra

Ajay Mishra (Expert)
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13 October 2010 Hi

Losses from other business
Note : The provisions of section 44AF are applicable only upto the A.Y 2010-11. from the A.Y.2011-12 the provision of Section 44AD & 44AF are replaced by New section 44AD.

Ajay Mishra

Ajay Mishra (Expert)
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13 October 2010 Hi

For forms go to the following link:

http://www.vakilno1.com/froms_html/it_forms.htm

Regards

Guest

Guest (Expert)

13 October 2010 Tax Audit Applicable to him.

Form 3CB and 3CD to be used as prescribrd u/s 44AB

Books of a/cs and other documents to be kept and maintained

Regards