Estimated Income under Sectn. 44AD

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roameri (Querist)
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13 July 2011 TURNOVER UNDER SECTN. 44AD.
From A.Y. 11/12 the profit shall be estimated at 8% of TURNOVER where total TURNOVER or GROSS RECEIPTS do not exceed Rs.60 lakhs during a year.
Question.
Does TURNOVER or GROSS RECEIPTS to be construed as Sales or as Sales+VAT ?
Thanks,
Jamshed F. Mehta

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 July 2011 It depends upon the method of accounting regularly employed by you. If you are recording sales on net basis and recording the Vat A/c separately, you may take the Gros receipts at the sales amount.

The safest approach, however, is to consider Sales+Vat both. I recommend to adopt this figure only. As any thing deducted from Gross Sales is not gross sales. That is Gross sales net off Vat.

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