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Bank channel & other mode under 44ad

SURANA (PROPRIETOR) (515 Points)

08 June 2017

Current ITR has option to Enter Turnover under 44AD in two columns.

1. Bank Channel

2. Other Mode

Does anyone has any brief detail or explanation for both this terms?

otherwise normally it should mean any payment received via Bank or Wallet will be term as Bank Channel... and anything other then will be Other MODE.

So in P/L we will have to show both figures under this mode differently...

What about the Credit Sales, where payment is yet to be received as on 31st March ? What head should it go? Since we are not yet sure about the Mode of Payment for it....

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2 Replies

Sanjay S (Chartered Accountant) (1375 Points)
Replied 08 June 2017

Segregation of digital receipts and other receipts under presumptive taxation scheme

[ITR 4]

1. As per the presumptive taxation scheme under Section 44AD, 8% of gross receipts or turnover will be deemed as income of the taxpayer. However, in 2017 Union Budget such limit has been proposed to be reduced to 6% for digital receipts of taxpayer.

2. In new ITR form, new columns have been inserted to show turnover received through digital mode. Consequently, columns have been inserted to show presumptive income at 6% and 8%.

3. The Finance Act 2016, had introduced the presumptive taxation scheme for professionals as well. Now new ITR 4 Form shows an option to avail such presumptive taxation scheme for professionals under Section 44ADA.

4. Also attaching below an article that describes the logic behind introducing this special clause in Sec.44AD.

Attached File : 886703 20170608200048 2017 81 taxmann com 19 a.rtf downloaded: 269 times

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CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13706 Points)
Replied 09 June 2017

If the turnover comprises of both cash and non cash components, it is beneficial to show separately in ITR under cash and non cash heading so that benefit of 8% and 6% can be taken respectively.