i) The scheme is applicable for any business (excluding a business already covered under Sec. 44AE) which has a maximum gross turnover /gross receipts of 60 lakhs.
ii)The presumptive rate of income is prescribed at 8% of gross turnover /gross receipts.
iii)An assessee with turnover below Rs. 60 lakhs, who shows an income below the presumptive rate prescribed under these provisions, in case his total income exceeds the taxable limit, required to maintain books of accounts and also get them audited
my question is" if a partnership firm doing garment trading is having a turnover of rs.30 lakh with g.p. of 9.5% and a n.p. of 0.5%" ( all genuene)
will it be covered under 44 AD? yes or no
what will be its tax liability?
if it is covered under 44AD then , whether it is attracted to scrutiny as the n.p i..e 0.5% is quite low to the prescribed 8%?
24 April 2011
Yes it is covered under section 44AD. Tax audit has to be done as the maximum amount not chargeable to tax in case of partnership firm is NIL.
CAclubindia
