31 July 2014
Dear Sirs, please guide me if i can compute my income in following manner.
I do not wish to opt for audit u/s 44AD & still claim a loss from speculation business. Following is the situation.
I have 3 business.
1. Tutions( total cash reciept being 275000)
2. Share trading ( Turnover being 10.75lacs & loss being 15000)
3. Speculative business ( turnover being 3lacs & loss being 1.65 lacs)
In the above situation, can i offer tution income & share trading business clubbed toghtre u/s 44AD where total turnover/reciepts will be (15.5lacs) @ 8% resulting in income of 1,24,000 & claim loss from speculitve business without offering it u/s 44AD.
In the above situation, my total income shall still remain withing basic exemption limit & i would thus not be required to opt for audit & can still claim loss to c/f. Is the above logic that ive used correct? If not, any alternative?
Please reply at earliest
31 July 2014
No! You are not allowed to opt for the above facility. The assessment in Income Tax is Assessee based and not on business based, hence the TO of all the businesses should first be combined before any calculations to be done on TO
02 August 2014
have to disagree with Mohit a bit on this.
The 44AD is not assessee based section.
If you an eligible business and a non-eligible business and profession, then only eligible business will be covered under 44AD and for the rest of the incomes, normal provision of 44AA and 44AB shall apply.
The only point of debate here is whether tuition income is an eligible business or not and it is on this point there are multiple views.
If we assume that tuition income is an eligible business, then you get covered 44AD for all the activities and turnover can be clubbed.
But where it is argued that tuition income is a profession and hence should not be covered under 44AD, then turnover cannot be clubbed. In such a case, while preparing ITR4, you will have to specifically provide the income covered under 44AD and the loss so earned shall be set off against tuition income. So there wont be any carry forward of loss
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