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Gross turn-over

G D Daga (Consultant) (40 Points)

14 June 2018

Under section 44ADA presumptive income is 50 % of gross receipt. GST to be included in gross receipt ?

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8 Replies

Jatin (Accountant) (3479 Points)
Replied 15 June 2018

No....

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177896 Points)
Replied 15 June 2018

Yes.

According to section 145A of Income Tax Act, for the purpose of tax filing and tax audit, the inclusive method should be used where as for the purpose of general purpose financial statements, the exclusive method should be followed.

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 15 June 2018

Dear Sir.,
Please can You explain it's why it's include u/s 44ad/ada...

Except these sections we show the T/O without Taxes....

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177896 Points)
Replied 15 June 2018

Yes, for all other purposes like TDS deduction. P&L acc etc, turnover is excluding taxes. But only for presumptive assessment which is based on 'Gross Turnover' or 'Gross Receipt' ..... the total receipts including taxes is taken into account.. Main reason given is, the assessment is based on 'without books of accounts', so how will you bifurcate taxes from gross receipts, without any books !!!

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Jatin (Accountant) (3479 Points)
Replied 15 June 2018

OK, Thank you very much Mr. Dhirajlal Rambhia Sir for enrichment of my knowledge

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G D Daga (Consultant) (40 Points)
Replied 15 June 2018

In form 26 AS amount credited does not include GST. Last year I received a notice from income tax saying "inconsistency in the amount shown in Sr. No. E3 under 44ADA of schedule BP and receipt available in form 26 AS" I had wrongly shown less in Sr.No. E 3. From this it appears that the gross turn-over excludes GST. Am I correct ?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177896 Points)
Replied 16 June 2018

Here...... when you declare the value less in ITR as compared to form 26AS, you are bound to receive notice; but if the amount declared is higher; it is accepted & notice not issued. So, that cannot be criteria.

Secondly, the client is going to declare the service value net of GST only (for the purpose of TDS deduction); so the figure in form 26 as is bound to be net off taxes; while for presumptive assessment gross receipts are taken based on your tax invoices or from your payment receipts or moreover from your bank credits, which are inclusive of tax.

G D Daga (Consultant) (40 Points)
Replied 16 June 2018

In ITR 4 gross receipt/turnover as per GSTIN also will have to be declared. As per one of the related threads this gross receipt excludes all taxes. As per the defination of turn-over under GST taxes are excluded. So at one place it is exclusive of taxes and another taxes will have to be included in the same form. Is this not a discrepancy ?

If the value of taxable service is say Rs 19.9 lakhs then there is no GST. So presumptive income is Rs 9.95 lakhs. If the value of taxable service is Rs 20.1 lakhs, turn-over including GST will be Rs 23.7 lakhs. Presumptive income on same will be Rs 11.85 lakhs. So you see the actual increase in income is only Rs 20,000/- but the increase in presumptive income is Rs 1.9 lakhs.

How can this be justified ?