44ad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2013 Dear Sir,
Suppose
Sale amount - 100/-
VAT - 5/-
Total - 105/-

For the purpose of Section 44AD net profit @8% would be calculated on Rs. 100/- or on Rs. 105/-?

Please advise me.

CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)
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18 July 2013 Net profit will be calculated on Rs.100.
But if in case you are taking any sort of Reimbursement of this VAT amount then calculation has to be made on Rs.105/-

Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2013 What kind of reimbursement?

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CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)
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19 July 2013 Reimbursement means that if you are getting any sort of VAT Remission from the local sales tax department of your state then you have to add that amount.

Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2013 You mean ITC adjustment?

CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)
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20 July 2013 No there is a big difference between ITC adjustment anf VAT Remission..Some States give remission from the VAT payability for boosting particular products in their area.
Therefore this VAT payability that the Sales Tax Department forgoes is also income in the hands of Tax Payer.