24 March 2016
SIR /MADAM THE FIRM HAS A TOTAL WORK DONE OF RS =815000.HOW EVER THE FIRM HAS RECEIVED FDR INTREST OF RS=315000.SHOULD I TAKE THE FDR INTREST SEPARATELY IN THE ITR WHILE FILING THE ITR 5 UNDER SECTION 44 AD . SHOWING THE NET PROFIT @ 8% OF TOTAL WORK DONE. I WOULD LIKE TO FURTHER MENTION HERE THAT THE CAPITAL INTEREST HAS BEEN TAKEN AND THE AMOUNT OF FDR INTEREST MINUS CAPITAL INTEREST WILL BE ADDED ON THE NET PROFIT OF THE FIRM.
24 March 2016
FD Interest is chargeable under the head 'Income from Other Sources' and hence is independent of the profit computed under section 44 AD. Further the expenses pertaining to earning the income from other sources alone can be deducted and interest for capital taken cannot be deducted from the same.
Capital interest may be deducted from the presumptive profit under section 44 AD.
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