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Calculation of 8% as per section 44ad for firm for ay 2019-2020-regarding

Tax queries 980 views 5 replies

Dhebek

Student CA IPC / IPCC

123 Points Posted on 24 June 2019

Respected CCI Members,

Partnership firm which is assessed under section 44AD for AY 2019-20.After Computing 8% on Turnover, Shall i deduct Partner's salary and Interest as per section 40(b) from income computed as per above mentioned section? Can Eight Percentage on Turnover construed as before deduction of Partner's remuneration?

Kindly help me in this regard.

Yours Sincerely,

Dhebek M N

Replies (5)

Varun Malhotra

social

342 Points Posted on 24 June 2019

No. Parner's salary & interest cannot be deducted from presumptive income assessed u/s. 44AD.

Dhebek Nagarajan

6 Points Posted on 24 June 2019

Thank you sir.
Hence we need to do tax audit if we show below 8% of turnover.Am i right sir?

Varun Malhotra

social

342 Points Posted on 24 June 2019

Yes. Correct as per sec. 44AD(4) of the act.

CA Navya Tejas

Chartered Accountant

132 Points Posted on 24 June 2019

Yes. 8 percent shall be construed as before deducting the remuneration and interest. Once 8 percent is calculated on the turnover (Sec 44AD), Section 40b provisions for deduction (Partners remuneration and Interest on Capital) can be invoked.