Sec 44ad
This query is : Resolved
06 January 2015
Hello
If we declare income @8% u/s 44AD but actual profit is 16% then what will be consequences. plz tell me how will deal with additional profit 8% which is not shown in ITR.
plz reply soon
If we declare income @8% u/s 44AD but actual profit is 16% then what will be consequences. plz tell me how will deal with additional profit 8% which is not shown in ITR.
plz reply soon
06 January 2015
As per sec 44AD a specified person can claim the business profit @8% or such higher percentage. This means you have to show minimum profit of 8% otherwise you have to maintain the proper books of account and get the accounts audited. This section doesn't prescribe the higher side for the profit % thus you can show 16% in the itr.
06 January 2015
from Income tax view point, nothing much will happen....as the department is NOT going to ask for the BOOKS
But looking forward....when in subsequent years....say after 4-5 years...the assessee might become eligible for TAX audit...the Opening balances wont match with the actual INVESTMENTs in hand...so be carefull
But looking forward....when in subsequent years....say after 4-5 years...the assessee might become eligible for TAX audit...the Opening balances wont match with the actual INVESTMENTs in hand...so be carefull
06 January 2015
Assessee at his desecration can higher income and then claim the depreciation and all other eligible deductions.
If he choose presumptive approach, he can not claim the depreciation and deductions under section 30 to 38 shall not be allowed.
Suresh sambu
9866198655
If he choose presumptive approach, he can not claim the depreciation and deductions under section 30 to 38 shall not be allowed.
Suresh sambu
9866198655
06 January 2015
You can account 16% profit in the books of accounts and declare income at 8% u/s 44AD in the ITR.
Here the assessee is free to exercise any option at his will. He may morally show actual income and pay tax on it as an Honest citizen of the country, but such Honesty is not digressed even if he files return @ 8% as he is legally correct.
Also, the AO cannot make any addition on this count as there is no provision under the Act permitting to make such addition.
Here the assessee is free to exercise any option at his will. He may morally show actual income and pay tax on it as an Honest citizen of the country, but such Honesty is not digressed even if he files return @ 8% as he is legally correct.
Also, the AO cannot make any addition on this count as there is no provision under the Act permitting to make such addition.
Message likes :
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07 January 2015
Thank you to all
One Important Point I would like to discuss that
Suppose My turnover is 60,00,000
Profit as Per ITR 8% = 4,80,000
Actual Profit 16% = 9,60,000
how to adjust additional Cash of Rs. 480000(960,000-480,000) in Books of Account. I am facing practical difficulty Bcz My investment is higher then My books of Account (AS per IT Department). But We are as Per IT Act. What action can be taken by department in future although we are not default as per IT Act Sec. 44AD.
One Important Point I would like to discuss that
Suppose My turnover is 60,00,000
Profit as Per ITR 8% = 4,80,000
Actual Profit 16% = 9,60,000
how to adjust additional Cash of Rs. 480000(960,000-480,000) in Books of Account. I am facing practical difficulty Bcz My investment is higher then My books of Account (AS per IT Department). But We are as Per IT Act. What action can be taken by department in future although we are not default as per IT Act Sec. 44AD.
07 January 2015
Mr Amol S. Joglekar please tell me what we should do. how to utilize excess investment.
07 January 2015
Maintain books as per actual profits earned. You can declare 8% profit u/s 44AD no action can be taken against you for this difference.
09 January 2015
What Mr Seetharaman suggests is quite PRACTICAL so as to keep the RISK of a CA at minimal.
And if you want to have the income tax and books of account in similar condition, you may think of "CAPITAL introduction"
And if you want to have the income tax and books of account in similar condition, you may think of "CAPITAL introduction"
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