How to show 'gross profit' and 'net profit' under sec 44ad

Hi Reena, 

First of all I would like to clarify your doubt on difference between the terms Gross Profit and Net Profit. If you are a  carrying on trading business, then your Gross Profit = Sales (-) Cost of Goods Sold or Sales (-) (Opening Stock (+) Purchases (+) Direct Expenses - Closing Stock).

In order to arrive at the Net Profit, deduct all other expenses like Salary, Electricity, Advertisement, Discount Allowed, Telephone Charges, Depreciation, etc. and to add all non trading income such as Commission Received, Discount Allowed by the Supplier, etc.

In your case,

Gross Profit = 12.86% of your Turnover

Expenses = All other expenses or Non-trading Expenses

Net Profit = Gross Profit - Non Trading Expenses

As you were said, you have filed your return under provisions of section 44AD in ITR form 3, in my opinion the ITR -4 (ITR 4S for AY 2016-17) was the right one for this scenario .