44AA and declaration of loss in ITR 5
This query is : Resolved
01 August 2023
As per ITR 5 instruction:
a) Assessee are required to fill in No books of accounts in Balance sheet and P&L if "whether you have maintained the accounts as per section 44AA" is selected as "No".
b) Part A - P& L (Item No. 65) In case you are not required to maintain regular books of accounts in respect of the business or profession carried on during the year, please fill up the summary details in respect of such activity at column 65 viz. gross receipts, gross profit, expenses and net profit. Declaring of loss from business / profession under no books of accounts is restricted.
so if my income is less than 120000, which will be so if my business is in loss, and my gross receipt in last 3 year is less than 1000000, i can not declare loss as partA p&l (item 65) does not allow declaration of losses. under which section of IT act it is so? what to do if i face such a situation. i am a partnership firm( non llp).
a) Assessee are required to fill in No books of accounts in Balance sheet and P&L if "whether you have maintained the accounts as per section 44AA" is selected as "No".
b) Part A - P& L (Item No. 65) In case you are not required to maintain regular books of accounts in respect of the business or profession carried on during the year, please fill up the summary details in respect of such activity at column 65 viz. gross receipts, gross profit, expenses and net profit. Declaring of loss from business / profession under no books of accounts is restricted.
so if my income is less than 120000, which will be so if my business is in loss, and my gross receipt in last 3 year is less than 1000000, i can not declare loss as partA p&l (item 65) does not allow declaration of losses. under which section of IT act it is so? what to do if i face such a situation. i am a partnership firm( non llp).
01 August 2023
If you will file ITR 5 and No books of Accounts then You can't file with LOSS.
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01 August 2023
" ....so if my income is less than 120000, which will be so if my business is in loss, and my gross receipt in last 3 year is less than 1000000, i can not declare loss as partA p&l (item 65) does not allow declaration of losses.""
If your (partnership firm) income is less then Rs. 1,20,000/-..... How can you define it as loss??
If your (partnership firm) income is less then Rs. 1,20,000/-..... How can you define it as loss??
01 August 2023
@Dhirajlal sir, i said "which will be so in case of loss", i mean by it that the income will be less than 120000 in case of loss..is not that a true statement?? is not a negative number is less than 120000??? please enlighten me if i am wrong.
01 August 2023
@ RAJA P M. i have books of account..but the i am not required to have books of account under 44AA. BUT if i say that i am not required to have books of account in GEN-A of the form.. They won't let me fill the BS and P&L
01 August 2023
@ RAJA P M. is there any other i can fill for the same
01 August 2023
"i mean by it that the income will be less than 120000 in case of loss..is not that a true statement?? is not a negative number is less than 120000??? please enlighten me if i am wrong."
For partnership firm the basic exemption limit is ZERO. So even Rs. 1 earning is its profit, is taxable at flat 30% rate.
For partnership firm the basic exemption limit is ZERO. So even Rs. 1 earning is its profit, is taxable at flat 30% rate.
01 August 2023
dhirajlal sir, the partnership is in loss that is the profit is less than zero. i need to file return of loss as per 139(3) and not return of income in 139(1) and the it rule 12 says itr 5 is the form to file 139(3). May be my wording was confusing in the question let me rephrase the whole question for you:
As stated above i need to file return of losses in ITR 5 . now as per the instruction to itr 5 if you select "No" to the question "whether you need to maintain books of account as per 44AA" then you have to put values in item no 65 of part A profit and loss, but in item no. 65 you can not declare loss.
Now, as per 44AA a person need to maintain books of account if his total income is more than 120000 or his gross receipt in any of the last 3 years is more than 1000000, but our firm does not satisfy these condition as our profit/income is less than 0 hence it is also less than 120000 and our gross receipts was less than 100000 in every of last 3 years.
So my ultimate question was how would i declare loss in itr 5.
and if i can not under which section it is restricted?
please note: we are not declaring income under presumptive taxation ( 44AD or others).
i hope i am clear sir.
As stated above i need to file return of losses in ITR 5 . now as per the instruction to itr 5 if you select "No" to the question "whether you need to maintain books of account as per 44AA" then you have to put values in item no 65 of part A profit and loss, but in item no. 65 you can not declare loss.
Now, as per 44AA a person need to maintain books of account if his total income is more than 120000 or his gross receipt in any of the last 3 years is more than 1000000, but our firm does not satisfy these condition as our profit/income is less than 0 hence it is also less than 120000 and our gross receipts was less than 100000 in every of last 3 years.
So my ultimate question was how would i declare loss in itr 5.
and if i can not under which section it is restricted?
please note: we are not declaring income under presumptive taxation ( 44AD or others).
i hope i am clear sir.
01 August 2023
Read sec. 139(3) properly, it will not accept loss after 31.07.2023, unless you are liable for tax audit u/s. 44AB IT act.
01 August 2023
yes i know that sir, i am asking if i am to file return of losses under 139(3) before the due date what would be the procedure.
01 August 2023
Without maintenance of books your claim of loss is not sustainable.
01 August 2023
yes it seems so.. but even if i keep books of account i have to select "No" to the question " are you required to maintained books of account under 44AA" as i am not required.. nevertheless i have maintained books of account but while filing the system show error and suggested as i have selected i am not required to maintain books of account i can not fill BS and P&L regular and have to enter value in " no books of account cases" . i have changed the answer to section 44AA to yes and filed the return..But as this is technically false statement, because i am not required to maintain such book, was it proper? and i am also interested to know which section of the IT act says i can not file loss without books of account..as the provision related to books of account is 44AA which clearly says i don't need to maintain books of account if income is less than 120000 and gross reciept in all of last 3 years is less than 100000. in this section there is no provision restricting declaration of loss without books of account..so this whole thing seems extra legal to me
01 August 2023
No law or rule required. It is simply natural justification. When you say you have somewhat about 8 to 9 lakhs turnover and declare any profit, ITD accepts it without any argument considering you as trustworthy (even they have right to verify whatever details you have). But when you say you have incurred loss, without any records.... Question arises naturally, on what bases you say that?
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02 August 2023
ok so at the end of the day, i havedone right by selecting yes in " do you required to maintain my books of account as per 44AA" and then furnishing details of my balance sheet and profit and loss, although as per 44AA i am not required to maintain books.
By the way, my turnover was actually 0 and yet they did not allow me to decalre No to 44AA.
By the way, my turnover was actually 0 and yet they did not allow me to decalre No to 44AA.
02 August 2023
By the way, my turnover was actually 0....
ITR 5 cannot be filed if your turnover is 0..
ITR 5 cannot be filed if your turnover is 0..
02 August 2023
which form i am suppose to fill then?
02 August 2023
however the system has accepted such return..may be i will be slaped with a notice..but why are you saying it is not allowed? please guide me to the provision under which it is restricted to file itr 5 if turnover/gross receipt from business is 0 during previous year..
02 August 2023
sir,
139 (1) "Every person,—
(a) being a company or a firm; or
(b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,
shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed50 form and verified in the prescribed manner and setting forth such other particulars as may be prescribed ."
Here it clearly stated every firm has to file return of income, there is no exemption limit in case of firm..
and as per IT rule 12 the form tobe used to file return under 139(1) and also 139(3) is itr 5. so please show rules to me if you are claiming otherwise, as you may very well understand that the matter is serious.
139 (1) "Every person,—
(a) being a company or a firm; or
(b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,
shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed50 form and verified in the prescribed manner and setting forth such other particulars as may be prescribed ."
Here it clearly stated every firm has to file return of income, there is no exemption limit in case of firm..
and as per IT rule 12 the form tobe used to file return under 139(1) and also 139(3) is itr 5. so please show rules to me if you are claiming otherwise, as you may very well understand that the matter is serious.
02 August 2023
Whether the turnover declared in ITR 5 was ZERO?
02 August 2023
yes, the firm had no reciept/ sale/ turnover
02 August 2023
Question here is whether you entered value '0' in turnover?
It is not possible to process the value zero in turnover.
It is not possible to process the value zero in turnover.
02 August 2023
yes i did not put any value for sale of goods or services or any other credit item in p&l and also have not put any value in schedule OI or schedule BP or any other column..there way 0 reciept shown...and i was able to file... and if i am restricted then it would mean i can not file ITR if i have no reciept as ITR 5 is the only applicable form as per my understanding
02 August 2023
Sir, are you saying if i had 0 gross reciept i can not file itr 5? if the answer is yes then how would i comply with 139(1)?
02 August 2023
It means you have not declared ZERO turnover while filing ITR. That is the point I wanted you to understand.
Refer:: https://www.caclubindia.com/experts/error-ocurred-on-filing-firm-nil-return-2906219.asp
Refer:: https://www.caclubindia.com/experts/error-ocurred-on-filing-firm-nil-return-2906219.asp
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02 August 2023
sir, now i am compeletly confused. Have i made mistake? or this is something technical you are talking. because in reality my firm did not earned a single paisa last year, and only value was in expense side. but yes we had fixed asset, inventory, bank balance etc. and i thought i declared the same in itr. what do you mean it is not zero? please elaborate. and utterly sorry for taking your so much time on this matter.
02 August 2023
You were already confused when I said about zero turnover, you gave reference of sec 139(1) IT act, where the reference is to 'income' and not 'turnover.' And as such the thread is getting elongated without any conclusive solution.
Finally, check your filed ITR, which you have already filed after so much analyzation of rules and laws pertaining to different aspects. If you find any mistake just revise it.
Or let CPC send you any defective mail, if it be there and after removing it refile it.
Good luck.
& Goodbye...
Finally, check your filed ITR, which you have already filed after so much analyzation of rules and laws pertaining to different aspects. If you find any mistake just revise it.
Or let CPC send you any defective mail, if it be there and after removing it refile it.
Good luck.
& Goodbye...
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02 August 2023
just to conclude the thread.
Sir, i have checked the filed itr and there is no revenue/sales/turnover coulmn any where in which i have put any value other than zero, in otherwords i have filed an itr 5 with 0 turnover.
And i referred to 139(1) to point out the fact that even if my turnover is 0 , i have to file itr. The very reason behind it is the fact that 139(1) does not refers to turnover (and not even to any exemption limit of income) in case of firm, and hence it does not matter what my turnover is while the question of filing itr comes. So a sudden declaration,that to from an expert, that i can not file itr 5 incase of 0 turnover, which i just did, obviously made me confused. if you want i can send you my itr form to check the truthfulness of my statement.
Have a nice day sir, adios
Sir, i have checked the filed itr and there is no revenue/sales/turnover coulmn any where in which i have put any value other than zero, in otherwords i have filed an itr 5 with 0 turnover.
And i referred to 139(1) to point out the fact that even if my turnover is 0 , i have to file itr. The very reason behind it is the fact that 139(1) does not refers to turnover (and not even to any exemption limit of income) in case of firm, and hence it does not matter what my turnover is while the question of filing itr comes. So a sudden declaration,that to from an expert, that i can not file itr 5 incase of 0 turnover, which i just did, obviously made me confused. if you want i can send you my itr form to check the truthfulness of my statement.
Have a nice day sir, adios
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