Section 44ad

This query is : Resolved

vijay wani (Querist)
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18 March 2015 I AM A PROPRIETOR AND MY GROSS TURN OVER IS 40 LAC, WITH PROFIT MARGIN IS 50% OF TOTAL TURN OVER. IF I FILE ITR U/S 44AD, INCOME COMES RS 3.2 LAC, BUT ACTUAL INCOME IS RS 20 LAC. SO U/S 44AD SHOULD I PAY TAX ON 8% OR SHOULD PAY ON 20 LAC (ACTUAL INCOME).
IN THIS CASE CAN AO ASK ME TO PAY ADDTIONAL TAX EVEN IF I FILE ITR U/S 44AD??

Soumitra Basu

Soumitra Basu (Expert)
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19 March 2015 44AD is a deemed taxation. You have to disclose actual profit or deemed profit whatever is higher. In that case you can not show 20 Lacs profit in your Profit and Loss Account and Balance Sheet. That will be treated as concealed income if you choose to offer tax on profit of 3.20 Lacs.