23 December 2015
44AD is applicable if Turnover not exceed 1 Crore . To give relief to small assessees, the Income-tax Law has incorporated a simple scheme.commonly known as Presumptive Taxation Scheme. There are two schemes, viz., the scheme of section 44AD and the scheme of section 44AE. An assessee adopting these provisions is not required to maintain the regular books of account and is also exempt from getting the books of account audited. In this advance learning we will cover the provisions of the presumptive taxation scheme provided in section 44AD. 44AD can be adopted only by a resident assessee whois an Individual, Hindu Undivided Family and Partnership Firm (not Limited LiabilityPartnership Firm).
The provisions of section 44AD can be adopted by the eligible assessee who is engaged in any business (except the business of plying, hiring or leasing of goods carriages referred to in source (As amended by Finance Act, 2013) section 44AE and except by the assessee who is engaged in any profession as prescribed under section 44AA or is running agency business or is earning income in the nature of commission or brokerage).
Income computed as per section 44AD (i.e., @ 8% of turnover or gross receipts of the eligible business, for the previous year) will be net income for the business covered under this scheme.
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