Santosh Nalawade (Practice) (355 Points)
01 December 2015
Sonia kaushik
(Accountant and Tax Executive at Freelancer)
(60 Points)
Replied 01 December 2015
Sonia kaushik
(Accountant and Tax Executive at Freelancer)
(60 Points)
Replied 01 December 2015
Miss Rinkal
(Student)
(1309 Points)
Replied 01 December 2015
@ Santosh Nalawade:
Firms are eligible for presumptive taxation u/s 44AD.
And remuneration and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40.
@ Sonia Kaushik:
Sorry to defer from your opinion wrt "Has not claimed deduction under chapter VIA under the heading C"
Only Deduction in respect of certain incomes i.e from Sec 80IA to Sec 80RRB (I.e under the heading C) cannot be claimed when opting for presumptive taxation u/s 44AD. Deductions under Chapter VIA -Deduction in respect of payments I.e 80C to 80GGC, 80TTA and 80U are eligible for deductions even in case of 44AD
Below mentioned is an extract of Sec 44AD
(1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession".
(2) Any deduction allowable under the provisions of section 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed :
Provided that where the eligible assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40
(3) The written down value of any asset of an eligible business shall be deemed to have been calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.
(4) The provisions of Chapter XVII-C shall not apply to an eligible assessee in so far as they relate to the eligible business.
(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.
(6) The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—
(i) a person carrying on profession as referred to in sub-section (1) of seaction 44AA;
(ii) a person earning income in the nature of commission or brokerage; or
(iii) a person carrying on any agency business.
Explanation.—For the purposes of this section,—
(a) "eligible assessee" means,—
(i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and
(ii) who has not claimed deduction under any of the section 10A,10AA,10B, 10BA or deduction under any provisions of Chapter VIA under the heading "C. - Deductions in respect of certain incomes" in the relevant assessment year;
(b) "eligible business" means,—
(i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and
(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of one crore rupees.
Sonia kaushik
(Accountant and Tax Executive at Freelancer)
(60 Points)
Replied 01 December 2015
Vivek Kurup
(.)
(355 Points)
Replied 02 December 2015
CA VIRAL SANGHVI
(Finance head)
(681 Points)
Replied 02 December 2015
Is it possible to file return of partnership firm us 44ad. If yes, what is treatment of partners share of profit and partners remuneration ??
yes it can be possible to file the return of partnership firm (not limited liability partnership). the profit so calculated after applying section 44 AD is the profit for calculation of remuneration.
Miss Rinkal
(Student)
(1309 Points)
Replied 02 December 2015
@ Vivek Kurup:
Thanks. I know that but my point was that deduction in respect of certain incomes will include 80IA to RRB which now I have modified accordingly.
Thanks once again to make me correct the wordings.
What I understood from Sonia's explanation was she was trying to indicate deductions u/c VIA I.e payments as well as incomes as she mentioned it as separate point for 80IA to 80RRB which is a part of deduction in respect of certain incomes. So I differed from her opinion.
Hope you get what I m trying to explain
ashok bansal
(proprietor)
(21 Points)
Replied 17 December 2015
What if the partnership firm has actual profit of say 12% ? In that case, as per the wording of the section, the firm will file return by claiming 8% profit. However, the share of profit of the partners ( actual ) will be more than what is appearing in the firm's income tax return.
Any comments ?
Siva .Venkataraman
(2 Points)
Replied 21 December 2016
If I have a partnership firm (registered, NOT LLP) in India in which there are five partners - two resident indians, two NRI and one foreigner, can I take advantage of 44AD? My firm provides reports and support services for administration of companies. It is clearly stated that a firm can avail 44AD as long as it is resident. Is my firm 'resident'? Thank you
Regards
CAclubindia
