Whether 44 ad is applicable for (super stockist)

This query is : Resolved

Dhinesh (Querist)
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08 March 2012 As my client is a super stockist in "Milk packets". As his turnover is 35,00,000/- for the financial year 2010-11. He earns only commission @ 1% (Rs.35,000/-) for the total turnover. he maintains books of accounts properly, if i put him in 44AD he is getting income of Rs.2,80,000/- and liable to pay Rs.8000/- as income tax or if i put him under 44AB he is liable for Digital Signature (Rs.500/-) and Audit Fees (Rs. 4,000/-) and Tax will be nil.

CA. Hari Kishan

CA. Hari Kishan (Expert)
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08 March 2012 Its the clients call.. as if he wishes to go for 44AD option of paying taxes or wish to go for 44AB option.. as of now it would be wise to opt for 44AD to avoid penalty under 44AB as the due date is over.. (AY 2011-12)

Dhinesh

Dhinesh (Querist)
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09 March 2012 Thank you Mr. Hari Kishan. Actually my query is "when a person's real earnings is below the income tax basic exemption" then why he is liable to pay tax? kindly advise me in this point of view. Even though his turnover is 35,00,000/- his real earnings is Rs.35,000/- only. If i put him under section 44AD he is liable for income tax.

i think you will understand my practical difficulty, and waiting for your reply.

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