Accounting standard 7

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amy (Querist)
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09 January 2012 hii . i wud like to know how to calculate income of the assessee in the following case . the assessee is a contractor whose contract receipts for the year do not exceed 60 lakhs .should revenue be calculated by applying Accounting Standard 7 or can he declare income as per Sec 44 AD of the Income Tax Act ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 May 2012 AS 7 is applicable for ACCOUNTING RECORDS. So in the books of account, the profit is to be calculated as per AS 7.

For income tax purpose, the Income Tax Act provides benefit of Section 44AD. So income can be declared @ 8% of gross receipts. (THIS IS ONLY FOR THE PURPOSE OF INCOME TAX)