Sec 44ada

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2016 Dear Experts
In AY 2017-18 my turover shall be estimated 40 Lakh. Pls clarify u/s 44ADA how much tax will be paid on 40 Lakh and which expenditure is allowable?

Thanks In Advance.....

ROSHAN

ROSHAN (Expert)
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27 November 2016 With Regard to your query, Below is the Example for you to understand SEC 44AD.
Assumptions: 1) Status of the Concern is a Partnership Firm.
2) Concern is Carrying out an eligible business.
3) Person/Concern is an eligible Assessee.

Profit from Business U/s 44AD
Particulars Amount
44 AD ( Say the turnover is Rs.40 lacs) then the income would be 8% 3,20,000
Less:

Interest allowable u/s 40(b) 1,00,000
Remuneration to partners allowable 1,00,000

Total Income of the Firm U/s. 44AD 1,20,000

Apart from Interest & Remuneration to Partners, all other Expenses are deemed to be allowed.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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27 November 2016 U/s 44DA You have to declare minimum profit of 50% of turnover. Out of your turnover of 40 lacs you have to declare a profit of 20 lacs by allowing 20 lacs expenditure and pay tax on 20 lacs.

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Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2016 I agree with seetharaman sir who has correctly interpreted the sec 44ADA however Roshan sir has also correctly interpreted the sec 44AD with an example. For that Thanks A Lot To both of you......................................
since my query was pertain to section 44ADA wherein i have to declare the
profit of 20 Lakh. Pls let me know on declaration of 50% profit weather any expenditure shall be allowable or not?
can i avail the exemption of 250000 and deduction of 80C & 24B?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 November 2016 No further expenditure is allowed. You can avail basic exemption of 2.50 lacs and deduction u/s 80C and 24B.